* Dollar ticks up, euro hit by weak German data

* Yields rise as trade deal optimism boosts risk sentiment

* Oil prices up on trade talk hopes, OPEC cuts

By Saqib Iqbal Ahmed

NEW YORK, Jan 8 (Reuters) - An index of world stock markets rose for the third straight session on Tuesday, with investors hopeful that the United States and China would strike a deal to end their months-long trade war that has hurt financial markets.

Increased risk appetite helped lift U.S. Treasury yields, while the dollar, which hit an 11-week low on Monday, rebounded as the euro weakened on concerns about a slowdown in the euro zone economy.

Tuesday's stocks advance added to gains logged over the past two sessions following last week's strong U.S. employment report and comments from the Federal Reserve chief that calmed worries that interest rate hikes would hurt growth.

Trade and concerns over slowing economic growth triggered a selloff at the end of 2018 that culminated in Wall Street posting its worst monthly performance in about a decade in December, driving down earnings estimates and stock valuations