NEW YORK  (Reuters) - European stocks edged higher on Monday after a rout last week while longer-dated U.S. Treasury yields rose to a fresh 12-year high as oil prices firmed even as China eased policy less than investors expected.

China's central bank trimmed its one-year lending rate by 10 basis points and left its five-year rate unmoved. That was a surprise to analysts who had expected cuts of 15 basis points to both as recovery in the world's second largest economy has lost steam due to a worsening property slump, weak spending and tumbling credit growth.

"The small injection of stimulus by China's central bank in the ailing economy has proved largely underwhelming given the scale of the challenges erupting across sectors, but it has given investors hope there could be more to come," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Analysts said concern around downward pressure on the yuan, which has lost nearly 6% against the dollar this year, is likely limiting the size and scope of rate cuts.

While disappointment sent Asian shares lower, European shares rose on Monday and U.S. stock futures also pointed to a recovery there. ,

Europe's STOXX 600 (.STOXX) index was up 0.7% by 1207 GMT, following last week's 2.3% drop, with energy companies outperforming as oil prices rose with tightening supply from Saudi Arabia offsetting demand concerns.

Oil prices rose as much as $1 after snapping a seven-week winning streak last week on concerns about Chinese demand. Brent crude was last at $85.74 a barrel, while U.S. crude was at $82.37.

In bond markets, a selloff that sent government borrowing costs to their highest in over a decade regained impetus on Monday.

Longer-dated U.S. Treasury yields were up 5-7 basis points with the 30-year yield touching a fresh 12-year high at 4.44%. Bond yields move inversely with prices.

"People are starting to get worried about the (bond) selloff and are look ahead to (Federal Reserve Chair Jerome) Powell and what he says later this week about peak rates," said Principal Global Investors's chief global strategist Seema Shah.

The key event for the week is the U.S. Federal Reserve's Jackson Hole conference, where markets assume Powell will note the jump in yields and the recent run of strong economic data. The Atlanta Fed's GDP Now tracker is running at a heady 5.8% for this quarter.

A majority of polled analysts think the Fed is done hiking, while traders are betting on a 40% chance of a final Fed hike by November.

The U.S. dollar, which has notched five weeks of gains helped by rising bond yields, was down 0.2% on Monday against a basket of peers, just below two-month highs touched on Friday.

The euro was up 0.3% against the dollar after last week's 0.7% loss.

The ascent of the dollar and yields was weighing on gold at $1,894 an ounce , after it touched a five-month low last week.

Prices for liquefied natural gas (LNG) were underpinned by the risk of a strike at Australian offshore facilities that could affect around 10% of global supply.

Europe's benchmark TTF front-month wholesale gas contract rose as high as 41 euros per megawatt hour in early trade, nearing August's 43 euro peak and was last up 3.7% at 39 euros, up 42% this month.

Earnings were also in focus with shares in Dutch payments processor Adyen (ADYEN.AS) dropping as much as 7%. The shares have lost nearly half their value following Thursday's weak earnings which raised concerns around the company's valuation.

Earnings from AI-darling Nvidia (NVDA.O) on Wednesday will be another major test of valuations.