* European stocks fail to match Wall Street records
* Fed minutes to reinforce rate hike conviction
* German bond yields hit lows despite strong data
* Oil prices fall on OPEC deal doubts
By John Geddie
LONDON, Nov 23 Financial markets showed the
diverging path of U.S. and euro zone monetary policy on
Wednesday with Wall Street breaking new ground and the dollar
perched near a 14-year high, as German bond yields plumbed new
World stocks edged up and the Dow closed
above 19,000 for the first time with investors expecting
a growth boost under the policies of U.S President-elect Donald
Trump and an imminent rate hike from the Federal Reserve that
should be reinforced by minutes released later in the day.
With European rate setters leaning the other way,
reaffirming their commitment to easy policy, the euro has
been pushed near one-year lows. The split has been most stark in
bond markets with yields on two-year German paper hitting record
lows, stretching the gap to U.S. equivalents to an 11-year wide.
In Britain, sterling was a tad weaker at $1.2408
before a budget update where hopes for fiscal stimulus have been
lowered as the government has stressed its limited borrowing
"We do like policy divergence trades," Rabobank strategist
Lyn Graham-Taylor said.
"I think markets had been a bit euphoric in the wake of
Trump and now they are coming around to the understanding that
there is not going to be fiscal stimulus that is going to be
good for everyone."
European stocks were flat, struggling to match the
exuberance in Asia, where stocks gained 0.7
percent to strike a one-week high, or the U.S., where the Dow
hit a record high up 0.35 percent, the S&P 500
gained 0.22 percent and the Nasdaq 0.33 percent.
With Japan on holiday, Australia's main index led
the action in Asia with a rise of 1.35 percent to a one-month
top helped by strength in bulk commodity prices.
China's blue-chip CSI300 index advanced 0.5
percent to a near 11-month peak as the yuan touched its lowest
in six years.
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YIELD GAP UNDERMINES EURO
With equities in demand, U.S. bonds were getting the cold
shoulder. Two-year note yields rose as far as 1.107
percent on Tuesday, the highest since April 2010.
Euro zone yields were heading in the opposite direction and
some solid growth data could not shake expectations for more
monetary easing from the European Central Bank next month.
That saw yields on German two-year paper dive to record lows
of minus 0.74 percent, which in turn expanded the
yield premium offered by Treasuries to an 11-year peak.
The widening spread kept the euro pinned at $1.0611,
not far from last week's one-year trough at $1.0569. Against a
basket of currencies, the dollar was up slightly at 101.12, very
close to a 14-year peak.
The dollar also kept most of its recent hefty gains on the
yen at 111.05, though it has met resistance around 111.35
in the last couple of sessions.
Emerging markets have struggled in recent days as surging
U.S. bond yields sucked much-needed capital out of Asia.
President-elect Donald Trump's past talk of trade tariffs has
also weighed on sentiment in the export-intensive region.
Analysts at JPMorgan said Trump's pledge to dump the
Trans-Pacific Partnership was already priced into markets.
"What may not be factored in is the possibility of
follow-through on other, more protectionist campaign proposals,"
they wrote in a note to clients.
"We remain concerned about this as a source of downside
risk, delivering a negative surprise to markets which so far
appear to be enamored of his emphasis on fiscal stimulus and
deregulation since the election."
Elsewhere, oil prices declined as doubts re-emerged over
whether OPEC would agree to a crude oil production cut at a
ministerial meeting next week.
Brent crude eased 10 cents to $49.03 a barrel, while
U.S. crude lost 5 cents to $48.00.
Industrial metals advanced on talk of demand from China and
the whole global reflation trade. Copper was near a 16-month
high, while iron ore futures <0#DCIO:> surged 8 percent on the
back of higher steel prices.
(Additional reporting by Wayne Cole in Sydney; Editing by