* Eyes on ECB meeting; euro zone fiscal stimulus prospect
* U.S. producer prices climb; Fed still expected to cut
* Oil drops on report Trump weighed easing Iran sanctions(Updates with close of European markets, adds oil prices)
By Chuck Mikolajczak
NEW YORK, Sept 11 (Reuters) - A gauge of global equitymarkets climbed on Wednesday, amid small signs of progress inthe trade war between the United States and China, while bondyields rose as investors remained unsure what stimulus measuresthe European Central Bank will provide at its Thursday meeting.
Stocks on Wall Street rose, buoyed by optimism on the tradefront after China announced its first batch of tariff exemptionsfor 16 types of U.S. products, days ahead of a planned meetingbetween trade negotiators.
"Maybe a little bit of an olive branch. The market has beensensitive to any developments on the China-U.S. trade war frontand this would be consistent with that," said David Joy, chiefmarket strategist at Ameriprise Financial in Boston.
"My own view is we shouldn’t read too much into it becauseit is something of long shot we are going to get any meaningfulbreakthrough on that situation any time soon."
The Dow Jones Industrial Average rose 139.9 points,or 0.52%, to 27,049.33, the S&P 500 gained 13.48 points,or 0.45%, to 2,992.87 and the Nasdaq Composite added63.65 points, or 0.79%, to 8,147.80.
The trade hopes also aided in pushing European shares toclose at a six-week high, with shares of London Stock Exchangeending the session up 5.9% after Hong Kong Exchanges andClearing made a surprise $39 billion takeoverapproach.
The pan-European STOXX 600 index rose 0.85% andMSCI's gauge of stocks across the globe gained0.56%, on pace for its sixth straight day of gains.
U.S. Treasury yields rose for a third day, tracking those inthe euro zone bond market, as investors were unsure about thestimulus measures the ECB will engage in, with a late report onTuesday the central bank may delay quantitative easing adding tothe uncertainty.
The 10-year yield hit a high of 1.752%, its highest level injust over a month.
Benchmark 10-year notes last fell 10/32 in priceto yield 1.7368%, from 1.702% late on Tuesday.
The European Central Bank's meeting comes ahead of nextweek's policy meeting by the U.S. Federal Reserve which is stillwidely expected to cut interest rates even as economic datashowed producer prices unexpectedly rose in August.
Expectations for a 25-basis-point cut by the Fed at its nextmeeting stand at 88.8%, according to CME's FedWatch, down from92.3% on Tuesday. Market participants currently see no chance ofa 50-basis-point cut from the central bank.
U.S. President Donald Trump pushed the Fed to cut interestrates to zero or into negative territory in a pair of Twitterposts on Wednesday.
In currencies, the euro weakened to a one-week low againstthe dollar ahead of the ECB meeting, while the dollar was ontrack for its best day in nearly two weeks against a basket ofmajor currencies.
The dollar index rose 0.33%, with the eurodown 0.34% to $1.1006.
Oil prices slumped more than 2% after a report that Trumpweighed easing sanctions on Iran, which could boost global crudesupply.
U.S. crude fell 2.56% to $55.93 per barrel and Brentwas last at $60.94, down 2.31% on the day.
(Reporting by Chuck Mikolajczak; Editing by Bernadette Baum andLisa Shumaker)