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GLOBAL MARKETS-Shares subdued as investors flip-flop on rate rises

* European stocks subdued in choppy trading

* Brent oil looking to get over April 2019 high

* Bond markets nudge up yields

* Fed chair Powell takes questions from U.S. congress later

* Graphic: Global asset performance tmsnrt.rs/2yaDPgn

* Graphic: World FX rates tmsnrt.rs/2egbfVh

LONDON, June 22 (Reuters) - World shares struggled to extend a bounce off four-week lows on Tuesday, oil prices were at their highest in well over two years, while indecisive bond markets flip-flopped on inflation and interest rate moves.

Europe’s STOXX 600 had given back its early gains as falls in technology and healthcare stocks - the main winners from the COVID pandemic - offset a modestly higher UK FTSE with its army of oil and mining firms.

Wall Street’s open also looked like being subdued after a jump on Monday, and government bond prices were choppy as fixed income investors continued to adjust to last week’s U.S. Federal Reserve shift, when policymakers pulled forward rate hike forecasts.

All eyes are on Fed chief Jerome Powell who appears before U.S. Congress from 1800 GMT, although investors were also starting to square up positions ahead of the start of the second half of the year next week.

“I’m not sure anyone really knows what this move by the Fed really means at the moment,” said CMC Markets senior strategist Michael Hewson.

“I’m not sure it’s changed a damn thing. The Fed is going to taper its purchases ... it’s just about finessing that message.”

It was not affecting oil markets. Brent crude prices hit $75 a barrel for the first time since April 2019 as traders remained bullish about a quick recovery in global oil demand as economies reopen.

Brent drifted back slightly in London but had gained 1.9% the previous day and U.S. WTI crude had jumped 2.8%. Both benchmarks are up nearly 50% this year and have now risen for the past four weeks on optimism over the pace of global COVID-19 vaccinations and expected pick-up in summer travel.

MSCI’s broadest index of Asia shares had advanced 0.8% overnight, moving above Monday’s four-week lows and notching a 4% gain so far this year.

Japan’s Nikkei led the way, rallied 3.1% as shipping firms soared 10% to a 10-year high. South Korea stocks rose 0.7%, Australia put on 1.6% and Chinese stocks closed up 0.8%.

“The reopening trade is still something we are looking for in the second half of the year,” said Eric Theoret, global macro strategist at Manulife Investment Management. He added Europe would see the most benefit, followed by emerging markets.

DOLLAR SMILES

In currency markets, the dollar was edging higher again after gaining sharply last week in the wake of the Fed’s policy surprise.

Against the euro, the greenback was through $1.19 per dollar again at $1.1894. It climbed to 110.49 yen, and the dollar index was up 0.15% to 92.072 after giving up about 0.5% on Monday.

“The whole world was mega short the U.S. dollar, and that’s in good part has probably been cleaned out already, and now we take a wee breath before the next move up,” said Westpac currency analyst Imre Speizer.

Bitcoin stabilised in Asian and European trading and was last at $31,575 having nearly halved in value over the last three months. Bitcoin and other cryptocurrencies had come in for heavy selling on Monday, hurt by a tightening crackdown on trading and mining in China.

Back in the bond markets, benchmark 10-year U.S. Treasury notes were yielding 1.50% again having sunk to around 1.36% at one point on Monday.

Adding to all the debate on inflation and rates, European Central Bank sources told Reuters that its policymakers remained some way apart on a new inflation strategy - the definition of price stability and how to achieve it - after a meeting at the weekend.

“To be fair the real action continues to be in the 30-year part of the (U.S.) curve,” said Deutsche Bank’s Jim Reid. That opened the week in Asia at 2.01%, rallied to 1.925% but then reversed course again was flirting with 2.12% in Europe.

Spot gold added 0.3% to $1,787.61 an ounce and copper steadied at $9,192 a tonne having dropped nearly 15% over the last 6 weeks. It is still up more than double where it was during the first peak of COVID concern early last year.

Reporting by Marc Jones; Editing by Alison Williams and Angus MacSwan

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