GLOBAL MARKETS-Markets brush off ugly data, pin hopes on stimulus

* World stocks pause ahead of EU meeting

* Oil rebound continues, Brent crude up 5%

* Asian shares slightly higher on Wall Street read-across

* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Thyagaraju Adinarayan

LONDON, April 23 (Reuters) - World stocks inched up on Thursday on hopes for a massive joint stimulus fund to support the European Union during the coronavirus crisis and on an ongoing rebound in oil prices, while investors brushed off a slew of awful economic data.

European stocks and U.S. stock futures were trading marginally higher as an internal EU note showed the bloc's commission was considering a plan worth 2 trillion euros ($2.2 trillion) to tackle a deep recession.

With all eyes glued on an EU meeting later in the day to discuss the measures, investors swept aside horrible data from the euro zone that showed economies have suffered massive blows from the coronavirus outbreak and measures to contain it.

The euro hit a one-month low, but the safe-haven dollar gained against major currencies.

The EU meeting comes a day after the U.S. Congress looked on course to approve nearly $500 billion more in coronavirus aid, taking the world's biggest economy's overall stimulus packages to nearly $3 trillion.

"(The) EU Council meeting will be closely watched to see how quickly EU policy makers will move towards area-wide fiscal risk-sharing," said George Cole, an economist at Goldman Sachs. "We expect the discussions to fall short of a full commitment to mutualise risks from the COVID-19 shock."

Pressure for action has grown, and on Thursday IHS Markit's Flash Composite Purchasing Managers' Index (PMI) for the bloc, seen as a good gauge of economic health, sank to by far its lowest reading since the survey began in mid-1998.

"The services sector, which accounts for approximately 75% of the eurozone economy, continues to be the worst hit by the drastic lockdown measures," said Ambrose Crofton, Global Market Strategist at J.P. Morgan Asset Management.

In the UK, PMIs fell to a new record low in March - and far below even the weakest forecast in a Reuters poll of economists.

Stocks and other risky assets barely acknowledged the numbers, though, since they were mostly backward-looking data. It was the EU meeting and the outcome that weighed on markets.

Italian two-year government bond yields fell 10 bps to 0.96% . Ten-year yields were down by the same amount at 2.05%.

The silver lining in macroeconomic news overnight was the European Central Bank's decision to let banks post collateral that was downgraded to junk during the coronavirus outbreak to prevent a credit squeeze in the euro zone. That pushed down the cost of insuring exposure to a basket of sub-investment grade European companies.

Asia was still riding the recovery in crude oil prices. MSCI's broadest index of Asia Pacific shares outside of Japan rebounded from two-week lows to be up 0.4% following an overnight lead from Wall Street.

MSCI's index of emerging market stocks rose about 0.5% amid increased speculation over global stimulus measures, while a recovery in the oil market also brewed some optimism.

Brent oil extended gains on Thursday to rise 7% to $21.77 a barrel on the prospects for further production cuts to reduce the glut in the oil market. U.S. crude gained 12% to $15.42.

The dollar, though broadly strong, slipped against the currencies of oil-producing states, giving up earlier gains as the recovery in crude prices helped to soothe markets.

The dollar fell 1% against the Russian rouble and 0.8% against the Mexican peso, retreating from a two-week high earlier in the session.

($1 = 0.9280 euros)

(Reporting by Thyagaraju Adinarayan in London and Swati Pandey in Sydney, editing by Larry King and Hugh Lawson)