* Democrats could win both races in key Georgia run-offs
* S&P500 futures down 0.7%, European shares up 0.08%
* Big tech regulation fears push Nasdaq futures down 2.1%
* U.S. 10-year yield hits 1%, highest since March
* Dollar hits lowest in nearly six years vs Swiss franc
By Carolyn Cohn
LONDON, Jan 6 (Reuters) - Bond yields rose and the dollar
fell on Wednesday on the prospect of more stimulus if Democrats
take control of the U.S. Senate following a run-off election in
Georgia, while oil hit an 11-month high after Saudi Arabia
agreed to reduce output more than expected.
Democratic challenger Raphael Warnock beat Republican
incumbent Kelly Loeffler in one of two Senate races in the
state, TV networks and Edison Research projected. Democratic
challenger Jon Ossoff held a slim lead over Republican David
Perdue in the other, with 98% of votes counted, according to
Edison. https://graphics.reuters.com/USA-ELECTION/GEORGIA-RUNOFF/xklvyjrjbpg/
Along with a narrow majority for Democrats in the House of
Representatives, a "blue sweep" of Congress could usher in
larger fiscal stimulus and pave the way for President-elect Joe
Biden to push through greater corporate regulation and higher
taxes.
"A Democratic-led government is expected to add more
stimulus, essentially spend more, to help mitigate the virus
crisis," said Paul Sandhu, head of multi-asset quant solutions,
APAC, at BNP Paribas Asset Management in Hong Kong. "That means
that there's going to be a weaker dollar."
Analysts generally assume a Democrat-controlled Senate would
be positive for economic growth globally and thus for most
riskier assets, but negative for bonds and the dollar on the
assumption the U.S. budget and trade deficits would swell even
further.
The 10-year U.S. Treasuries yield rose above 1% US10YT=RR
for the first time since March, on expectations of larger
government borrowing under a Senate split 50-50 with Vice
President-elect Kamala Harris, as president of the upper
chamber, becoming the tie-breaker.
"History tells us it is much easier to get things done when
one party controls everything, as Democrats and Republicans have
had difficulties cooperating for at least 30 years," Danske
analysts said in a note.
German bond yields DE10YT=RR followed Treasuries to hit
their highest in almost five weeks. GVD/EUR
The euro rose to as high as $1.2344 EUR= , a level last
seen in April 2018, while the yen hit a 10-month high of 102.57
to the dollar JPY= . The dollar hit its lowest in nearly six
years against the Swiss franc CHF= .
Bitcoin rose more than 5% to a record high of $35,879
BTC=BTSP .
World stocks .MIWD00000PUS gained 0.1%, edging back
towards recent record highs, and European stocks .STOXX ticked
up 0.08%.
But futures for the U.S. benchmark S&P 500 EScv1 fell
0.7%, while Nasdaq futures NQc1 slid 2.1%, on fears Democrats
could pursue tighter regulations on big tech firms.
Other industries, such as banks, oil and gas and healthcare,
could come under heavier scrutiny, while infrastructure and
alternative energy sectors could benefit. CLIMB
Oil prices rose to their highest since February 2020 after
Saudi Arabia agreed to reduce output more than expected in a
meeting with allied producers, while industry figures showed
U.S. crude stockpiles were down last week. O/R
U.S. crude futures CLc1 rose to a high of $50.24 a barrel
before trimming gains, having climbed 4.9% on Tuesday.
International benchmark Brent crude futures LCOc1 rose
0.54% to $53.89.
In Asia, Japan's Nikkei .N225 fell 0.4% while MSCI's index
of Asian-Pacific excluding Japan .MIAPJ0000PUS erased earlier
gains to trade flat.
Shanghai stocks extended gains, with the CSI300 index
.CSI300 rising 0.7% and reaching its best levels since 2008,
shrugging off New York Stock Exchange's chaotic handling of how
it will treat Chinese companies to comply with sanctions set by
the Trump administration.
The exchange made a second sudden U-turn as it said it was
reconsidering its plan to allow three Chinese telecom giants to
remain listed. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
US 10-year Treasury yield above 1% https://tmsnrt.rs/3s19rBp
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