* U.S.-China trade negotiations in focus
* Turkish lira plunges as London swap market revives
* Oil falls as Trump calls on OPEC to boost output
* Palladium slumps as slide from record high gathers steam (Updates with open of U.S. markets; changes dateline, previous London)
By Lewis Krauskopf
NEW YORK, March 28 (Reuters) - Benchmark U.S. and European bond yields edged higher on Thursday after prolonged slides, while the regions' shares were volatile as investors eyed developments involving U.S.-China trade talks and economic growth.
While the U.S. dollar was rising against a basket of key currencies, the Turkish lira plunged as liquidity returned to the London foreign-exchange market, prompting President Tayyip Erdogan to blame the currency's weakness on attacks by the West.
Another severe move was seen in palladium, which plummeted 6.0 percent as concerns that an economic slowdown could dent demand and a weak technical picture pushed investors to book profits after a record run.
Investors have been on heightened alert for signs on the strength of the U.S. economy since Friday, when the 3-month U.S. Treasury yield exceeded the yield on the 10-year note, an inversion of the yield curve that is widely seen as an indicator of a recession.
Data on Thursday showed the U.S. economy slowed more than initially thought in the fourth quarter, keeping growth in 2018 below the Trump administration's 3 percent annual target.
“We are seeing the same themes impacting capital markets over the last few days," said Kristina Hooper, chief global market strategist at Invesco. "We have this overarching concern about where global growth is headed. Every data point has some impact on that.”
Wall Street's main indexes gave up initial solid gains stemming from trade-talk optimism.
The Dow Jones Industrial Average fell 10.18 points, or 0.04 percent, to 25,615.41, the S&P 500 lost 2.38 points, or 0.08 percent, to 2,802.99 and the Nasdaq Composite dropped 13.53 points, or 0.18 percent, to 7,629.85.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin were arriving in Beijing on Thursday for a new round of talks with Chinese officials aimed at ending a months-long trade war.
China has made proposals in talks with the United States on a range of issues that go further than it has previously, as the two sides work to overcome obstacles to end their protracted trade war, U.S. officials told Reuters.
"That kind of news always has an impact on markets in this environment where there is hypersensitivity to the trade situation,” Hooper said.
The pan-European STOXX 600 index lost 0.07 percent, as investors weighed signs of trade progress and worries over Britain's chaotic effort to leave the European Union.
MSCI's gauge of stocks across the globe shed 0.23 percent, as many key Asian indexes ended lower.
Benchmark 10-year U.S. Treasury yields rose from 15-month lows as investors continued to adjust to a dovish pivot from global central banks.
U.S. 10-year notes last fell 7/32 in price to yield 2.3946 percent, from 2.372 percent late on Wednesday.
Germany's 10-year bond yield, the European benchmark, rose from 2-1/2-year lows but remained negative.
The dollar rose against rivals - which were weakened by dovish soundings from central banks - in spite of the cut to the U.S. economic growth estimate in the fourth quarter.
The dollar index rose 0.4 percent, with the euro down 0.2 percent to $1.1224.
Oil fell after U.S. President Donald Trump called for the Organization of the Petroleum Exporting Countries to boost crude production to lower the price of the commodity.
U.S. crude fell 0.57 percent to $59.07 per barrel and Brent was last at $67.20, down 0.93 percent on the day.
Additional reporting by Marc Jones in London; Editing by Mark Heinrich and Dan Grebler