Stocks slide, yields up on 'higher for longer' rates view

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LONDON/SINGAPORE, Oct 22 - Global stocks dipped on Tuesday, while bond yields and the dollar traded near multi-month highs, as investors reined in expectations for more big U.S. interest rate cuts ahead of U.S. elections.

"We're getting very close to the U.S. election and the data in the U.S. has been strong. So there is a question about how much the Fed can do," said Peter Schaffrik, global macro strategist at RBC Capital Markets, referring to U.S. monetary policy easing. Adding to the uncertainty is the looming U.S. election, where former Republican president Donald Trump and Democrat Vice President Kamala Harris are in a tight battle to win over some of the more competitive states ahead of the Nov. 5 voting day.

Pepperstone strategist Michael Brown said he did not buy into the theory that the so-called"Trump trade" alone was behind the sell-off in Treasuries. Besides the yen, foreign exchange markets steadied after a session of selling almost everything against the dollar. "I think will wait until after the U.S. election as they may need to calibrate," said Mike Kelly, head of multi-asset at PineBridge Investments.

 

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