* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
By Samuel Indyk
LONDON, May 20 (Reuters) - Shares rebounded on Friday after China cut a key lending benchmark to support its economy, though a global equities gauge remained set for its longest weekly losing streak on record amid investor worries about slowing growth and high inflation.
China cut its five-year loan prime rate (LPR) - which influences the pricing of mortgages - by 15 basis points on Friday morning, a sharper reduction than expected, as authorities seek to cushion the impact of an economic slowdown. It left the one-year LPR unchanged.
At 0833 GMT, the pan-European STOXX 600 was up 1.2% and set for its first daily gain in three.
The MSCI world equity index, which tracks shares in 50 countries, rose 0.5% but for the week was still shedding 1% and on track for its seventh consecutive weekly decline, its longest losing streak since its inception in 2001. It would also be the longest including back-tested data extending to January 1988.
"Investors are obviously looking to do a bit of bargain-hunting, because some stocks look pretty cheap at the moment," said Nathan Sweeney, Deputy CIO of multi-asset at investment manager Marlborough.
China's LPR cut "shows you not all central banks are trying to create an environment where the market sells off," he added.
The gains in Europe and Asia came after a late Thursday rally on Wall Street petered out, leaving the Dow Jones Industrial Average down 0.75%, the S&P 500 0.58% lower and the Nasdaq Composite off by 0.26%.
Euro zone bond yields were higher after two days of hefty falls as risk sentiment improved following China's rate cut.
Germany's 10-year government bond yield was up 3 basis points (bps) at 0.969%, well below last week's eight-year high of 1.189%.
Money markets are now pricing in 38 basis points of tightening from the European Central Bank by its July meeting . This suggests a 25 bps hike is fully priced in, and markets attach a roughly 52% probability of an additional 25 bps move.
The U.S. 10-year yield was at 2.860%, up half a basis point from Thursday's close, and down from a top of 2.873% earlier on Friday. The two-year yield climbed 2 bps to 2.631% compared with a U.S. close of 2.611%.
In currency markets, moves were relatively muted with the dollar little changed but still headed for its worst week since early February, after a 10%, 14-week surge.
The dollar index, which measures the currency against six major rivals, was trading flat at 102.91.
Gold prices were firmer and were set for their first weekly gain since mid-April as the dollar retreated. Spot gold was up 0.1% at $1,844 an ounce, having risen 1.4% to its highest level in a week on Thursday.
Oil prices were lower as investors worried that weakening global economic growth and tighter central bank monetary policy could curb a recovery in fuel demand.
Brent futures for July fell 31 cents, or 0.28%, to $111.73 a barrel, while U.S. West Texas Intermediate (WTI) crude for June fell 56 cents, or 0.5%, to $111.65 on its last front-month day.
Bitcoin was flat at $30,295. Smaller rival Ether was up 0.6% at $2,030.
(Reporting by Samuel Indyk in London and Andrew Galbraith in Shanghai; editing by John Stonestreet)