GLOBAL MARKETS-Dollar gains, hitting commodities, before FOMC

                                
 * Dollar short-covering lifts currency before FOMC minutes
                                
 * Gold slides, oil slips below $82 on stronger dollar
                                
 * U.S. Treasury prices rise ahead of auction, Fed minutes
                                
 * Global stocks ease as investors weigh recent big gains
 (Adds open of U.S. markets; changes dateline; previous
LONDON)
                                
 By Herbert Lash
                                
 NEW YORK, Oct 12 (Reuters) - The U.S. dollar gained on a
short-covering bounce on Tuesday, causing crude oil, gold and
other commodities to slip as investors awaited the latest
indication on further monetary easing from the Federal
Reserve.
                                
 Traders covered positions in currency markets as they
scaled back some of their more aggressive expectations of fresh
quantitative easing before the release of minutes from the
Sept. 21 meeting of the Federal Open Market Committee.
                                
 The dollar rose against the euro and a basket of major
currencies while a pull-back in global equity markets and
commodities added fuel to the dollar's bounce. For details see:
 [ID:nLDE69B1DJ]
                                
 The euro <EUR=> was down 0.40 percent at $1.3818, and the
dollar <JPY=> was down 0.26 percent at 81.87 yen.
                                
 "On the macro level what is happening to the dollar is 100
percent predictable. There is a direct reverse correlation
between the dollar and the amount of dollars being printed,"
said Peter Kenny, managing director at Knight Equity Markets in
Jersey City, New Jersey.
                                
 Gold eased and copper dipped on the dollar's bounce-back,
while oil slid for a second day, falling below $82 a barrel
after Saudi Arabia signaled the Organization of Petroleum
Exporting Countries would maintain current production levels.
[ID:nLDE69B0U7] [ID:nLDE69B0OF] [ID:nSGE69B07B]
                                
 Saudi Arabian Oil Minister Ali al-Naimi said on Monday he
was happy with the oil market as he arrived in Vienna for the
first OPEC meeting in seven months set for Thursday.
[ID:nLDE69A22W]
                                
 U.S. crude for November <CLc1> slid 80 cents to $81.41 a
barrel. ICE Brent <LCOc1> fell 59 cents to $83.13.
                                
 Both MSCI's all-country world equity index <.MIWD00000PUS>
and its emerging market index <.MSCIEF> fell about 1 percent
each, while the pan-European FTSEurofirst 300 <.FTEU3> index
was down about 0.7 percent.
                                
 European shares pared losses in early afternoon trade after
data showed U.S. chain store sales rose last week, although
caution remained ahead of the release of FOMC minutes later in
the day. [ID:nLDE69B1D3]
                                
In stock trading, benchmark indexes were down. The Dow Jones
industrial average <.DJI> fell 54.57 points, or 0.50 percent,
to 10,955.77. The Standard & Poor's 500 Index <.SPX> was down
4.60 points, or 0.39 percent, at 1,160.72. The Nasdaq Composite
Index  <.IXIC> was down 5.20 points, or 0.22 percent, at
2,397.13.
                                
 After an 8.8 percent run-up in the S&P 500 in September,
followed by a 2.1 percent rise so far in October, investors and
traders were reassessing the market, Kenny said.
                                
 "We've gotten a little ahead of ourselves, and the markets
are primed for a reset. I'm not talking about a wholesale
sell-off, but I am talking about a reset closer to sound
valuations," he said.
                                
 Prices in the U.S. Treasury market mostly rose as
follow-through from a weak employment report on Friday combined
with a global pullback in stocks. [ID:nN12164527]
                                
 But the bond market's two main catalysts were still ahead:
the release of the FOMC minutes and the auction of $32 billion
worth of three-year Treasury notes.
                                
 German government bond yields fell as speculation over the
magnitude and timing of expected U.S. monetary easing grew and
the two-year U.S. Treasury yield hit a record low.
[ID:nLDE69B1B8]
                                
 The 2-year U.S. Treasury note <US2YT=RR> was down 1/32 in
price to yield 0.35 percent, after earlier slipping to 0.335
percent.
                                
 The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
6/32 in price to yield 2.37 percent.
                                
 Commodities slipped, with the Reuters/Jefferies CRB Index
<.CRB> down 0.78 point, or 0.26 percent, at 295.59
                                
 Spot gold <XAU=> fell $4.75 to $1,348.20 an ounce.
                                
 In Asia, Japan's Nikkei <.N225> closed down 2.1 percent,
while Asian stocks were down 1.3 percent, according to the MSCI
Asia ex-Japan index <.MIAPJ0000PUS>.
 (Reporting by Emily Flitter in New York; Tamawa Desai,
Harpreet Bhal, George Matlock, Zaida Espana, Joe Brock and Jan
Harvey in London; Writing by Herbert Lash; Editing by Dan
Grebler)