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* China's yuan on track for biggest monthly decline since 1994
* Wall St stocks lower; German real estate lifts European shares
* Euro falls on expectations of aggressive ECB easing
By April Joyner
NEW YORK, Aug 30 (Reuters) - Hopes of easing trade tensions between China and the United States helped a gauge of global stocks edge higher on Friday despite weakness on Wall Street, though caution over pending U.S. tariffs on Chinese goods put the yuan on track for its biggest monthly decline in 25 years.
Statements from U.S. President Donald Trump and China's commerce ministry on Thursday that the countries were engaged in trade talks brought some respite to equities, which have been roiled this month by escalating trade tensions, including the announcement of further tit-for-tat tariffs. pan-European STOXX 600 .STOXX rose 0.7%, helped by a surge in German real estate shares, though U.S. stocks gave up early gains. The MSCI All-Country World Index .MIWD00000PUS rose 0.23%.
On Wall Street, the Dow Jones Industrial Average .DJI rose 12.01 points, or 0.05%, to 26,374.26, the S&P 500 .SPX lost 1.44 points, or 0.05%, to 2,923.14 and the Nasdaq Composite .IXIC dropped 30.32 points, or 0.38%, to 7,943.08.
Friday notwithstanding, MSCI's gauge of global stocks was on track for its second monthly loss of the year and its biggest August percentage decline since 2015.
Market watchers expressed caution given the fluctuating rhetoric around U.S.-China trade relations. Despite recent conciliatory comments, the Trump administration on Sunday is scheduled to begin collecting 15% tariffs on more than $125 billion in Chinese imports, including smart speakers, Bluetooth headphones and many types of footwear.
China's yuan CNH= fell 0.26% to 7.161 per dollar and was on track for its weakest month since Beijing's currency reform in 1994. U.S.-China situation is like a prisoner's dilemma," said Jeremy Gatto, senior vice president and portfolio manager at Unigestion in Geneva. "The parties have more to gain by cooperating, but they've almost gone too far back to find a solution.
"We'll be living with trade war fears for a while to come," Gatto said.
In fixed-income markets, U.S. Treasury yields treaded water, with the yield curve between 2-year and 10-year notes US2US10=TWEB still inverted. An inversion of the yield curve is widely seen as a signal that a recession is likely in one to two years. 10-year Treasury notes US10YT=RR last yielded 1.5163%, from 1.516% late on Thursday.
Euro zone bond yields were capped by data showing inflation remained at 1.0% in August, well below the European Central Bank's target. bond yields were on track for their biggest monthly decline in more than six years after the anti-establishment 5-Star Movement and opposition Democratic Party reached an agreement on a coalition government. currencies, the euro EUR= tumbled 0.60% to $1.10 after the low euro zone inflation figure raised expectations for aggressive easing by the ECB.
The dollar index .DXY rose 0.32%.
The safe-haven Japanese yen JPY= rose 0.21% to 106.28 per dollar and was on track for its biggest monthly gain in three months.
Sterling GBP= stabilized at $1.2164 ahead of a crucial period for the British parliament before it is suspended ahead of Britain's scheduled exit from the European Union on Oct. 31. commodities, spot gold XAU= was little changed at $1,527.46 an ounce. U.S. crude CLc1 fell 3.05% to $54.98 per barrel and Brent LCOc1 was last at $60.31, down 1.26% on the day.
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