* 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 close of European markets)
By Herbert Lash
NEW YORK, Oct 12 (Reuters) - The U.S. dollar rose on a
short-covering bounce on Tuesday, pushing crude oil, gold and
other commodities lower as investors awaited fresh indications
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 new
Fed purchases of bonds -- known as 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 pullback in global equity markets and
commodities added fuel to the dollar's rebound. For details
see: []
The euro later trimmed losses against the dollar after Axel
Weber, a member of the European Central Bank Governing Council,
said the ECB's government bond-buying program has not worked
and should be scrapped. []
The euro <EUR=> was unchanged at $1.3873, after earlier
touching a one-week low of $1.3774.
"Investors are anxious ahead of the Federal Reserve
minutes," said Heino Ruland, strategist at Ruland Research in
Frankfurt. "More details of quantitative easing could change
things and push equities higher." []
MSCI's all-country world equity index <.MIWD00000PUS> fell
0.5 percent and its emerging market index <.MSCIEF> slid 0.8
percent. The pan-European FTSEurofirst 300 <> index
closed down about 0.3 percent at 1,071.26.
European shares pared losses in early afternoon trade after
data showed U.S. chain-store sales rose last week, but oil
stocks pulled down the overall index on falling crude prices.
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, while gold
eased on the dollar's bounce. [] []
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.
[]
U.S. crude for November <CLc1> slid 51 cents to $81.70 a
barrel. ICE Brent <LCOc1> fell 37 cents to $83.35.
POLISHING THE APPLE
On Wall Street, benchmark indexes were mixed after Barclays
raised its price target on Apple Inc <AAPL.O>, lifting the
Nasdaq into the black. []
Lee Ainslie of hedge fund Maverick Capital said technology
stocks are priced at the cheapest in 20 years. []
At 12:55 p.m., the Dow Jones industrial average <> was
down 39.29 points, or 0.36 percent, at 10,971.05.The Standard &
Poor's 500 Index <.SPX> was down 2.18 points, or 0.19 percent,
at 1,163.14. But the Nasdaq Composite Index <> was up 3.76
points, or 0.16 percent, at 2,406.09.
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, said Peter Kenny, managing
director of Knight Equity Markets in Jersey City, New Jersey.
"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," Kenny said.
BONDS AND DOLLAR EDGE HIGHER
Prices in European and U.S. government bonds mostly rose as
follow-through from a weak employment report on Friday combined
with a global pullback in stocks. []
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 bonds rose as speculation over the size
and timing of expected U.S. monetary easing grew and the
two-year U.S. Treasury yield hit a record low. []
The 2-year U.S. Treasury note <US2YT=RR> fell 1/32 in price
to yield 0.36 percent, after earlier slipping to 0.335
percent.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
2/32 in price to yield 2.39 percent.
The dollar rose against a basket of major currencies, with
the U.S. Dollar Index <.DXY> up 0.10 percent at 77.521.
Against the Japanese yen, the dollar <JPY=> was down 0.34
percent at 81.80.
"What we've seen is the dollar is still a bit stronger, not
only against the euro but also against a basket of currencies,"
said Andrey Kryuchenkov of VTB Capital. []
A stronger dollar renders dollar-denominated commodities
more expensive for non-dollar buyers.
Spot gold <XAU=> fell $6.15 to $1,346.80 an ounce.
Copper, a proxy for China's growth outlook, took back early
losses to trade up, supported by expected positive trade data
from China and continued supply concerns. []
In Asia, Japan's Nikkei <> closed down 2.1 percent at
9,388.64, while Asian stocks were down 1.3 percent, according
to the MSCI Asia ex-Japan index <.MIAPJ0000PUS>.
(Reporting by Wanfeng Zhou, Emily Flitter in New York; Tamawa
Desai, Kirsten Donovan, Harpreet Bhal, George Matlock, Zaida
Espana, Joe Brock and Jan Harvey in London; Writing by Herbert
Lash; Editing by Jan Paschal)
