GLOBAL MARKETS-Bonds slip, stocks climb after Democrats win Senate

* Euro STOXX 600 up 0.2%
* Bonds across world fall, taking cue from U.S. Treasuries
* Dollar bounces after hitting near 3-year low
* Commodities, finance, chipmakers lead broad equity gains
* S&P 500 futures up 0.4%

By Tom Wilson
LONDON, Jan 7 (Reuters) - Bonds dropped and stocks rose on
Thursday as investors bet Democrat control of the U.S. Congress
would enable President-elect Joe Biden to borrow and spend
heavily, while a bruised dollar strained to recover from
near-three year lows.
U.S. Treasuries extended their steepest selloff in months
after Democratic Party victories in two Georgia races handed
them narrow control of the Senate, bolstering Biden's power to
pass his agenda.
Europe's Euro STOXX 600 .STOXX gained 0.2%, with indexes
in Frankfurt .GDAXI and Paris .FCHI up 0.4% and 0.6%
respectively. Growth-linked sectors from energy .SX7E to
miners .SXPP rallied on the prospects of more U.S. stimulus,
though UK shares .FTSE turned negative.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in almost 50 countries, rose 0.2%.
S&P 500 futures ESc1 rose 0.4%. A shaken Congress in the
early hours of Thursday formally certified Biden's election
victory, after hundreds of President Donald Trump's supporters
had stormed the U.S. Capitol. The shocking images of the assault on American democracy had
earlier knocked sentiment, though markets focused on the
implications of Democrat control of Congress.
Earlier, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS had risen 0.4% and Japan's Nikkei
.N225 hit its highest since 1990.
"The market is saying the reflation trade is on," said
Justin Onuekwusi, portfolio manager at Legal & General
Investment Management.
"The Democrat sweep means there will be more flexibility and
speed to writing a fiscal check so a one-off U.S. fiscal boost
as a bridge to a post-vaccine world is definitely on the cards."
Wednesday's bond sell-off pushed the yield on benchmark
10-year U.S. Treasuries US10YT=RR , which rises when prices
fall, over 1% for the first time since March. It rose as high as
1.0660% on Thursday before slipping back. US/
Euro zone government bonds followed suit, with Germany's
10-year Bund yield up slightly to -0.55%. Japanese government
bonds also slipped. BRUISED DOLLAR
The Democrat victory reverberated in currency markets, too.
The dollar had sunk on the Georgia results to a near-three
year low against a basket of six major currencies =USD , with
traders betting growing U.S. trade and budget deficits would
weigh on a greenback already bruised.
On Thursday it bounced 0.6% to 89.780, on track for its
biggest one-day gain since October.
Against the euro EUR= it clawed away from an almost
three-year low of $1.22, and also languished near recent
multi-year troughs against the Aussie AUD=D3 , kiwi NZD=D3
and Swiss franc CHF= .
Still, some analysts said rising bond yields may help the
dollar's fortunes.
"Higher Treasury yields should benefit the dollar against
the euro and the yen," said Masafumi Yamamoto, chief currency
strategist at Mizuho Securities in Tokyo.
"However, the dollar will remain weaker against commodity
currencies like the Aussie and emerging market currencies."
Other risk-on assets climbed, with safe havens like the
Japanese yen JPY=EBS losing ground.
Copper, a barometer for global growth, gained 0.3% MCU3=LX
to hover near an 8-year high.
In Asia, miners Rio Tinto RIO.AX and BHP BHP.AX earlier
surged to all-time peaks, while chipmakers Samsung 005930.KS
and SK Hynix 000660.KS drove South Korean stocks .KS11 to a
record high.
Oil prices held around a 10-month high, basking in the
afterglow of a production cut promised by Saudi Arabia. Brent
crude futures LCOc1 were flat at $54.25 a barrel.
Gold XAU= was steady at $1,921 an ounce, and bitcoin
BTC=BTSP firm after hitting a fresh record high of $37,800.
The cryptocurrency has soared over a quarter already this
month after almost quadrupling last year.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
U.S. Treasury yield curves https://tmsnrt.rs/38kig1l
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>