GLOBAL MARKETS-Stocks, U.S. yields climb after Democrats win control of the Senate

* Treasury benchmark yield hits 10 month high
* Dollar bounces after hitting near 3-year low
* U.S., global equity indexes hit record highs

(Updates prices, adds graphic links and file photo)
By Rodrigo Campos
NEW YORK, Jan 7 (Reuters) - Bond prices dropped and stocks
hit record highs on Thursday as investors bet Democratic control
of the U.S. Congress would enable President-elect Joe Biden to
borrow and spend heavily, while higher yields helped a bruised
dollar recover from near three-year lows.
U.S. Treasuries prices extended their steepest sell-off in
months, with the benchmark yield at its highest in 10 months,
after victories in two Georgia races handed the Democratic Party
narrow control of the U.S. Senate, bolstering Biden's power to
pass his agenda as his party controls both chambers.

The MSCI world equity index .MIWD00000PUS , which tracks
shares in almost 50 countries, rose over 1% to hit a record high
for the third session this week.
A shaken Congress formally certified Biden's election
victory in the early hours of Thursday, after hundreds of
President Donald Trump's supporters had stormed the U.S.
Capitol. The shocking images of the assault had earlier knocked
sentiment, though traders focused on the implications of the
Democrats' control of Congress.
On Wall Street, major indexes hit record highs on bets that
more pandemic stimulus under a Democrat-controlled U.S.
government will help the economy ride out the downturn.
"You're seeing a reflation trade on the assumption that a
more progressive and aggressive fiscal stimulus packages could
be in the offing," said Keith Buchanan, portfolio manager at
GlobAlt in Atlanta.
The Dow Jones Industrial Average .DJI rose 238.07 points,
or 0.77%, to 31,067.47, the S&P 500 .SPX gained 56.4 points,
or 1.50%, to 3,804.54 and the Nasdaq Composite .IXIC added
317.71 points, or 2.49%, to 13,058.51.
The pan-European STOXX 600 index .STOXX rose 0.51% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
1.18%. Emerging market stocks rose 0.36%.
Earlier, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS had risen 0.35% and Japan's Nikkei
.N225 hit its intraday highest since 1990 before ending up
1.6%.
The prospect for future stimulus spending sent bond prices
lower, with the yield on the benchmark hitting its highest since
March. It rose as high as 1.088% on Thursday. US/
"The Georgia Senate elections just added a tailwind to
existing trends of reflation and upward pressure on Treasury
yields," said Bill Merz, head of fixed income research at U.S.
Bank Wealth Management in Minneapolis.
Benchmark 10-year notes US10YT=RR last fell 10/32 in price
to yield 1.0761%, from 1.042% late on Wednesday.
The 30-year bond US30YT=RR last fell 21/32 in price to
yield 1.8499%, from 1.821%.
Meanwhile Germany's 10-year Bund yield DE10YT=RR dipped
slightly to -0.55%.
BRUISED DOLLAR
The Democrats' victory reverberated in currency markets,
too.
The dollar had sunk 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 further weigh on
the greenback.
On Thursday, it rose 0.573%, on track for its strongest
session since at least late October, with the euro EUR= down
0.48% to $1.2266.
The Japanese yen weakened 0.77% versus the greenback at
103.86 per dollar, while Sterling GBP= was last trading at
$1.3565, down 0.31% on the day.
"Once (Treasury yields) start to move, as they did
yesterday, it wasn't a big move but it was in the right
direction, that is the direction of the future," said Joseph
Trevisani, senior analyst at FXStreet.com.
Oil prices touched their highest since late February on a
fall in U.S. stockpiles and in the wake of a pledge by Saudi
Arabia to cut output by more than expected.
U.S. crude CLc1 recently rose 0.57% to $50.92 per barrel
and Brent LCOc1 was at $54.47, up 0.31% on the day.
Spot gold XAU= dropped 0.2% to $1,914.71 an ounce. Silver
XAG= fell 0.58% to $27.14.
Bitcoin BTC=BTSP hit a record high that breached the
$40,000 mark, and was last up 5.24% at $38,781.90.

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Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
U.S. Treasury yield curves https://tmsnrt.rs/38kig1l
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