GLOBAL MARKETS-Rising U.S. coronavirus cases hurt stocks, push debt yields lower

(Adds U.S. market open, byline; previous LONDON)

* Escalating U.S-China tensions, data weigh on markets

* Oil prices fall on agreement to ease supply curbs

* Gold prices ease as ECB keeps policy on pause

By Herbert Lash

NEW YORK, July 16 (Reuters) - Government debt yields and global equity markets fell on Thursday as a surge in U.S. coronavirus cases weighed on risk sentiment that also was hurt by deteriorating U.S.-China relations and worse-than-expected Chinese retail sales.

Asian stock markets and the Chinese yuan fell as China grappled with the pandemic and with heightened tensions with the United States over trade, technology and geopolitics.

The risks to China's economic outlook were partly reflected in data that showed Chinese consumers kept their wallets tightly shut in June. Retail sales slid 1.8%, the fifth month of decline and worse than a forecast for 0.3% growth last month.

On Wall Street, the S&P 500 slipped from a five-week high as data showing elevated levels of U.S. unemployment claims highlighted concerns about the economic toll from rising U.S. coronavirus cases.

U.S. stocks are taking a pause after a strong run-up in recent days, said Jon Adams, senior market strategist at BMO Global Asset Management in Chicago.

"There is a bit more concern today at least around the resurgence of the virus, and initial jobless claims were a bit higher than expectations," Adams said.

"We do think we might see a pause in the resumption of economic recovery that we've seen over the last couple of months," he said.

MSCI's world equity index, which tracks shares in 49 nations, fell 0.8% to 545.39.

On Wall Street, the Dow Jones Industrial Average fell 0.4%, the S&P 500 lost 0.67% and the Nasdaq Composite dropped 1.41%.

U.S. retail sales rose a better-than-expected 7.5% in June. But Labor Department data showed 1.30 million people filed for state unemployment benefits during the week ending July 11, slightly down from the prior period.

Treasury yields fell and gold eased, though it remained above $1,800 an ounce. The 10-year Treasury note fell 2.8 basis points to yield 0.602%.

Spot gold prices fell 0.31% to $1,805.67.

China accused the United States of "gangster logic" after President Donald Trump ordered an end to Hong Kong's special status under U.S. law in response to China's imposition of new security legislation on the former British colony.

The United States also said it was studying the national security risks of social media applications including China's TikTok and WeChat.

China said it would respond to "bullying" tactics from Washington, but that it would stick to the Phase 1 trade deal the countries reached last year.

In currency markets the euro, which hit a four-month high of $1.1452 on Wednesday, rose 0.16% at $1.1428. The dollar index fell 0.071% at $95.9240 and the yen was up 0.14% at $107.0700.

Economic activity in the 19-country euro zone had shown signs of a "significant, though uneven and partial recovery," European Central Bank President Christine Lagarde said.

But the outlook remained uncertain amid risks of a second wave of infections and the ECB will use its stimulus firepower fully even as the euro zone economy shows some signs of rebounding from its pandemic-induced recession, Lagarde said.

Oil prices eased after OPEC and allies such as Russia agreed to taper record supply curbs from August, though the drop was cushioned by hopes for a swift pick-up in U.S. demand after a big drawdown from the country's crude stocks.

Brent crude fell 0.14% at $43.73 a barrel. U.S. crude slid 0.27% at $41.09 a barrel.

(Reporting by Herbert Lash; Editing by Bernadette Baum)