(Adds details, updates prices)
* World stocks steady near 2-week low
* Crude oil, metal prices rise on growth outlook
* Expectations of faster growth spur inflation fears
* Eyes on Fed's Powell testimony at 1500 GMT
* Global asset performance:http://tmsnrt.rs/2yaDPgn
By Danilo Masoni and Anshuman Daga
MILAN/SINGAPORE, Feb 23 (Reuters) - Optimism about the economic outlook pushed commodity prices to new highs on Tuesday, helping stocks steady as expectations of a dovish testimony by Federal Reserve Chairman Jerome Powell calmed down bond yields.
The MSCI world equity benchmark .MIWD00000PUS was flat near two week lows by 0919 GMT, helped by gains in commodity-heavy equity indexes in Asia and a rally in European travel stocks on the prospect of easing social restrictions.
British Prime Minister Boris Johnson set out a phased plan on Monday to end a COVID-19 lockdown in the world's sixth largest economy. stocks had been weighed down in recent sessions by a rapid surge in global bond yields which fuelled expectations that central banks could eventually turn less accommodative in a bid to tame inflation. Tech stocks were among the hardest hit.
But the sell-off in the bond market eased after European Central Bank chief Christine Lagarde said on Monday the central bank was "closely monitoring" rising borrowing costs.
Investors now expect Fed's Powell to be equally reassuring when he testifies before Congress at 1500 GMT.
"If there were already any expectations that Powell could try to calm down rates, then (Lagarde's remarks) have just further cemented them," said Giuseppe Sersale, strategist and fund manager at Anthilia in Milan.
Tech stocks and rate-sensitive sectors like utilities in Europe however fell, offsetting stronger travel and commodity stocks and pushing down the
In Asia, the rally in commodities lifted Australia's S&P/ASX 200 .AXJO 0.9%, while tech-laden South Korea's Kospi .KS11 lost 0.3%. Japanese markets were shut for a public holiday.
Nasdaq futures ESc1 were down 0.6% at three-week lows after high-growth stocks such as Apple AAPL.O , Microsoft MSFT.O and Tesla TSLA.O dragged the index down 2.5% on Monday, while S&P 500 ESc1 futures inched 0.1% lower.
Bond yields have risen sharply this month as prospects of more U.S. fiscal stimulus boosted hopes for a faster economic recovery globally. However, that is also fuelling inflation worries, prompting investors to sell growth stocks that have rallied in recent months.
"Real U.S. interest rates are now in positive territory, which has created some concern around the consequences for equities markets," Cesar Perez Ruiz, chief investment officer at Pictet Wealth Management said in a report.
U.S. 10-year Treasury yields US10YT=RR edged up to 1.374% but remained below the one-year high of 1.394% hit on Monday.
Germany's 10-year Bund yields DE10YT=RR also rose to -0.309% but were below the 8-month high of -0.278% hit in the previous session.
Commodity prices strengthened again.
Oil prices jumped by more than $1, underpinned by optimism over COVID-19 vaccine rollouts and lower output as U.S. supplies were slow to return after a deep freeze in Texas shut in crude production last week. ID:nL1N2KT03M
Brent crude LCOc1 was last up 0.9% at $66.18 a barrel after earlier hitting a fresh 13-month high of $66.79, while U.S. crude CLc1 rose 1.2% to $62.45 a barrel.
"Oil has been caught up in the broader commodities move higher, with a weaker USD proving constructive for the complex," ING strategists led by Warren Patterson said in a note.
"Meanwhile, there is also a growing view that the oil market is looking increasingly tight over the remainder of the year".
Copper prices meanwhile hit a 9-1/2-year high as tight supply and solid demand from top consumer China boosted sentiment. ID:nL1N2KT0BC
In currency markets, the dollar briefly dropped to its lowest since Jan. 13 ahead of Powell's testimony, while commodity-linked currencies hovered near multi-year highs.
The dollar index =USD was up 0.1% at 90.143, with the euro EUR= flat at $1.2151.
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http://tmsnrt.rs/2egbfVh Global asset performance
http://tmsnrt.rs/2yaDPgn
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