MORNING BID-On stock markets, $3.5 trillion and counting

A look at the day ahead from Sujata Rao

Ten-year U.S. Treasury yields have risen for six weeks straight, their longest rising streak in eight years. But the Fed, clearly seeing higher borrowing costs as commensurate with economic recovery, has essentially declined any action. So with President Joe Biden's $1.9 trillion spending package getting the nod from Congress, Treasury yields are on the rise again and Wall Street is gearing up for another hit.

The yield-sensitive grouping of FAANG plus Tesla and Microsoft has lost $760 billion in value since mid-February and futures for the tech-heavy Nasdaq index are already down 1.5% on Monday. Asian stocks ended on a weak note though Europe's tech-lite bourses might prove more resilient.

But rising yields are tightening euro zone financial conditions too. Much of it stems from exogenous factors though there are signs of domestic improvement too; Germany's Ifo institute said on Monday manufacturing sector sentiment improved for the third month in a row.

So the ECB's Thursday meeting has taken on more urgency; indeed some officials such as Fabio Panetta have effectively called for yield curve control to be adopted. We also find out later on Monday whether the ECB stepped up bond-buying last week under its PEPP emergency stimulus scheme to slow the yield rise.

European policymakers may be relieved however by the dollar's recovery against the euro; the greenback is at three-month highs, as rising real yields and economic recovery.

But signs of economic recovery -- and possibly inflation -- are everywhere; after Friday's forecast-beating U.S. payrolls figure, even Japan reported a sharp rise in its so-called economy watchers' index. Oil prices have vaulted above $70 (partly driven by Yemeni rebels' drone attack on Saudi production facilities)

Yields may have nowhere to go but up if data stays robust and central banks stay shtum.

Key developments that should provide more direction to markets on Monday - U.S. crowd-safety company Evolv Technology is combining with NewHold Investment SPAC to go public in a deal valuing it at $1.7 billion. -UBS begins appeal against 4.5 billion-euro penalty levied by a French court for allegedly helping clients stash undeclared assets offshore. -Norwegian holding company Aker is establishing a unit to invest in bitcoin and blockchain -BOE Governor Andrew Bailey speaks 1000 GMT

(Reporting by Sujata Rao)