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Graphic: World FX rates (Updates prices throughout, recasts) By Elizabeth Howcroft LONDON, March 3 (Reuters) - European stocks rose on Friday and Wall Street was set to open higher as investor risk appetite was boosted by data pointing to economic growth, even as expectations for rate hikes kept euro zone government bond yields near multi-year highs. At 1217 GMT, the MSCI world equity index , which tracks shares in 47 countries, was up 0.3% on the day and set for a 0.8% rise on the week overall. Stock markets gained in Asian trading, with investors optimistic about signs that the world's second-biggest economy is making a steady rebound after the Chinese government ditched stringent COVID-19 controls in December. Activity in China's services sector expanded at the fastest pace in six months in February, driving a solid increase in employment, a PMI survey showed. The positive market sentiment continued during the European session, with Europe's STOXX 600 up 0.7% and London's FTSE 100 up 0.2% . The recovery in euro zone business activity gathered pace last month, PMI survey data showed, in the latest piece of data to suggest the bloc will avoid a recession. But euro zone government bond yields were still near their highest in years after euro zone inflation data on Thursday drove market expectations for the European Central Bank's (ECB) terminal rate to around 4%. Estonian central bank chief Madis Müller made the case for further ECB rate hikes on Friday, while ECB Vice President Luis de Guindos warned of persistent inflation. At 2.744%, the benchmark 10-year German yield was near its highest level since 2011 and on track for its biggest weekly rise since December . Investors are trying to gauge the path for Federal Reserve rate hikes, after strong U.S. data in recent weeks suggested rates may need to be higher for longer. "We seem to be in a tug of war between the China reopening theme which basically means re-rating global growth expectations higher and the Fed re-pricing," said Vasileios Gkionakis, European head of FX strategy at Citi. Gkionakis said that although risk assets faced headwinds from tighter monetary policy, global demand is picking up. Wall Street was set to open higher and the U.S. Treasury yields paused their rally. The U.S. 10-year Treasury yield fell to 4.0145%, down from Thursday's high of 4.091% . The euro was up 0.1% on the day at $1.0607 , while the U.S. dollar was down 0.2% against a basket of currencies at 104.79 . Oil prices dipped but were still set for a weekly gain. Cryptocurrencies suffered as the crisis engulfing crypto-focused bank Silvergate worsened. Bitcoin was down around 4.8% at around $22,347, its lowest since Feb. 15 . <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global FX performance ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Elizabeth Howcroft; Editing by Alexander Smith and Shounak Dasgupta)
