GLOBAL MARKETS-Growth fears boost safe havens, shares up on rate hopes
* Euro dips below $1.30 after weak German PMI data
* European shares gain on rate cut hopes
* Yen broadly firmer on safe-haven demand
* Commodities slip as China data adds to demand concerns
LONDON, April 23 (Reuters) - The dollar hit a two-week high against the euro, commodities fell and German bond prices jumped on Tuesday when data revealed slower business activity in Germany and China, the world's two biggest exporters, fuelling global growth fears.
European shares, however, were given a boost by the evidence that Europe's biggest economy was slowing, as that strengthened a view among investors that the European Central Bank will cut its key interest rate at an upcoming policy meeting on May 2.
The FTSEurofirst 300 index was up 1 percent at 1,167.01 points by midday, and U.S. stock index futures pointed to firm start on Wall Street on the back of strong corporate earnings reports.
"Right now we are in a place of sub-par global growth, and the euro zone is lagging behind, stuck in recession," said Nick Kounis, head of macro research at ABN-AMRO.
"It makes us more confident of an ECB rate cut in May, but really the ECB should be doing more and thinking of other ways to stimulate growth," he said.
The latest Purchasing Managers' Indexes (PMIs) for the euro area showed business activity in Germany shrank for the first time in five months in April, while a broader gauge of the wider 17-nation zone showed the region still mired in recession.
A similar survey for U.S. manufacturing is due later in the day and is expected to show that growth in factory activity there slowed slightly this month, while an earlier Chinese PMI, produced by HSBC, revealed factory output slipping in April.
In the wake of the data a search for safety by investors led to gains in the yen against both the euro and the dollar, while the greenback rose against a basket of major currencies, and U.S. Treasuries and German government bond prices also rose.
The euro tumbled more than 1 percent against the Japanese currency to 127.87 yen and fell 0.6 percent against the greenback to $1.2990, threatening a decisive break of the $1.30 to $1.32 range it has held for the past few weeks.
The yen's gains left the dollar down 0.6 percent at 98.66 yen but not far from 100 yen, a level most market players still believe will eventually be broken.
"The dollar has tested the psychological 100 yen level twice, and it will eventually be broken," said Niels Christensen, currency strategist at Nordea in Copenhagen.
Against a basket of major currencies the dollar, often considered the ultimate safe haven, gained 0.3 percent to 82.90 .
In the debt market German Bund futures hit their highest level since June 1, touching a peak of 146.69, up 34 ticks. The 10-year cash bond yield dropped 1.5 basis points to 1.21 percent .
The U.S. Treasury 10-year note rose 9/32 in price to yield 1.664 percent <US10YT=RR >, its lowest since mid-December 2012 and down 3 basis points from late U.S. trade on Monday.
The economic headwinds from China had earlier hit Asian shares, sending MSCI's broadest index of Asia-Pacific shares outside Japan down 0.5 percent. Chinese shares posted their worst daily loss in nearly a month.
MSCI's world equity index, which is heavily weighted toward U.S. shares, was up 0.25 percent, helped by Wall Street gains on Monday.
The HSBC report on China, its first economic indicator for the second quarter following weaker-than-expected growth in first-quarter gross domestic product, weighed heavily on commodity markets worried about the outlook for future demand.
June Brent oil futures fell 80 cents to $99.58 a barrel , while U.S. crude for June delivery was down 62 cents at $88.57.
"China and German data disappointed, so it's not a big surprise that oil comes off, and the technical picture points to another push lower," said SEB analyst Bjarne Schieldrop.
London copper futures fell to an 18-month low of $6,762.25 a tonne before snapping back to $6,845 a tonne by midday, down 1.3 percent on the day.
Gold dropped around 1 percent to $1,415 an ounce on the growth concerns but was also hit by reports that investors in exchange traded funds are continuing to liquidate positions.
Gold has recovered some ground after last week's tumble, but ETF selling sums up weakening confidence in the metal.