* Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh (Updates prices)
By Saikat Chatterjee
LONDON, May 6 (Reuters) - European stocks tumbled to a one-month low and German bond yields slipped below zero on Monday after U.S. President Donald Trump threatened to raise tariffs on China, triggering a global rout in risky assets.
Trump said on Sunday he would raise tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon. On Friday, he had cited good progress in trade talks and praised his relationship with Chinese President Xi Jinping.
"Everyone expected talks were heading in the right direction and almost close to finishing," said Daniel Lenz, a rates strategist at DZ Bank in London. "This was totally out of the blue and the reaction is that we have more risk aversion today."
An index of Chinese shares plunged more than 7 percent. U.S. stock futures fell 1.6 percent. Oil prices sank and the Chinese yuan dropped to a 10-month low.
MSCI world equity index, which tracks shares in 47 countries, fell half a percent.
Trump tweeted on Sunday that trade talks with China were proceeding "too slowly" and that he would raise tariffs on $200 billion of Chinese goods to 25 percent on Friday from 10 percent. The tweets stirred up hitherto calm markets.
China's foreign ministry said on Monday a delegation was preparing to go to United States for trade talks.
Many market watchers regarded the latest episode as a negotiating tactic by Trump, but investors still pared their positions in risky assets.
STOCKS FALL, BONDS RISE European stocks fell and E-Mini futures for the S&P 500 slid 1.7 percent, signalling a rough open for U.S. stocks on Monday.
Germany's main stock index was down 1.8 percent. A broader index of European shares declined 1.7 percent to its lowest level since early April.
Japanese and London markets were both closed for holidays, exacerbating the moves.
Losses in equities translated into gains for bonds. Benchmark government bond yields in Germany retreated below zero and not far from March's two-and-a-half-year low of minus 0.09 percent.
Emerging-market currencies and commodity-linked currencies were the hardest hit. The Australian dollar fell half a percent against the U.S. dollar and the offshore yuan lost nearly a percent
In commodity markets, Trump's tweets sparked a plunge in oil prices. U.S. crude dropped as much as 3.1 percent to its lowest in more than five weeks before recovering bouncing to $61.49 per barrel, still off 0.8 percent on the day. Brent crude was 0.4 percent lower at $70.57 per barrel.
The selloff in risky assets led spot gold to rise 0.1 percent, to $1,279.20 per ounce.
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Reporting by Saikat Chatterjee and Virginia Furness, editing by Larry King