* MSCI world equity index down 0.3 percent at 243.91
* Oil falls below $70 a barrel on supply concerns
* Government bonds, dollar firmer
By Natsuko Waki
LONDON, June 22 (Reuters) - World stocks slipped on Monday while government bonds and the dollar rose as a decline in oil prices below $70 a barrel and caution ahead of this week's data and Federal Reserve meeting weighed on risky assets.
A closely-watched German Ifo survey showed investor morale improved in June, with its business climate index rising to 85.9 from an upwardly revised 84.3 in the previous month. Investors are focused on this week's euro zone purchasing managers' surveys and data on the U.S. housing sector -- key for consumer spending -- to see if an economic recovery is strong enough to justify recent gains in equities.
Monday's decline in oil prices stemmed from weak gasoline prices after investors grew concerned there would be ample fuel supply in the United States to meet demand during the summer holiday season.
U.S. crude oil fell half a percent to $69.20 a barrel.
"Oil prices were off slightly, hurting energy stocks and there's some weakness in banks," said Richard Hunter, head of equities at Hargreaves Lansdown.
"Now as we come into the summer period in the absence of any positive news, we are likely to trend sidewards."
MSCI world equity index fell 0.3 percent, after posting its first weekly loss since mid-May last week.
The FTSEurofirst 300 index fell 0.8 percent. Mining stocks rose after Xstrata said it wanted talks with Anglo American about a proposed merger of equals worth about $68 billion.
Anglo American's shares rose nearly 10 percent.
Even with a recent setback, world stocks are up more than 7 percent this year.
"We've been comfortable in overweighting equities. In equities, we expect modest double digit or high single digit returns this year," Rick Lacaille, chief investment officer at State Street Global Advisors, told Reuters financial television.
"We remain of the view that equities offer a reasonable value. There's enough return for us to overweight."
Emerging stocks were steady on the day.
FED MEETS
The dollar rose 0.4 percent against a basket of major currencies ahead of the Federal Reserve's monetary policy meeting later this week.
Investors are split on whether the Fed will expand its existing $300 billion plan to purchase Treasuries when it meets.
If the Fed announces a plan to expand its purchase programme, investors who had fled Treasuries in search of higher yields might return to lock in recently elevated yields.
"Even though yields have soared, there are no concrete signs that lending in the economy is picking up steam and other monetary indicators such as the money multiplier is still near post-collapse levels," UBS said in a note to clients.
"Our economists expect changes in the FOMC statement will reflect a bit more optimism on the prospects for recovery but also a stronger signal that there will be no rush to unwind stimulus."
The benchmark 10-year Treasury yield was largely steady at around 3.77 percent
The June Bund future rose 16 ticks.
Investors were also cautious ahead of a record $104 billion auction of Treasuries this week. (Additional reporting by Simon Falush, editing by Mike Peacock)