GLOBAL MARKETS-Shares slide, dollar up as hopes of economic recovery fade

* MSCI World -0.6%; STOXX Europe 600 -1%
* Follow Asia stock slide to two-mth low overnight
* U.S. Fed officials warn on economy; greenback rises

By Simon Jessop and Andrew Galbraith
LONDON/SHANGHAI, Sept 24 (Reuters) - Global shares slid and
the dollar rose on Thursday on investor concern about another
economic hit from the coronavirus pandemic, ahead of German
sentiment data and speeches from a clutch of central bankers.
After a summer lull in much of Europe, the infection rate
has begun to rise sharply, with a number of countries including
Britain introducing tougher rules to help limit the spread of
the virus.
The MSCI World .MIWD00000PUS index was down 0.6% at 0733
GMT, its fifth day in the red out of the last six and hovering
near a two-month low. Asia-Pacific shares outside Japan
.MIAPJ0000PUS fell 1.93%, chalking up their worst day in two
months after economic warnings from U.S. Federal Reserve
officials.
A broad gauge of Europe's top shares, the STOXX Europe 600
.STOXX , was down 1%.
Fed Vice Chair Richard Clarida and Cleveland Federal Reserve
Bank President Loretta Mester both said the economy remained in
a "deep hole", with Clarida calling for more
stimulus. Yet political stalemate in Washington continues to frustrate
efforts to prop up the world's biggest economy, beset by one of
the worst COVID-19 death rates globally.
"A U.S. fiscal deal was baked into markets and now what you
are seeing is that the probability of a deal going through has
simply reversed," said Justin Onuekwusi, a London-based
portfolio manager at Legal and General Investment Management.
"We have heard this week how important a fiscal deal is to
the Federal Reserve but from a political standpoint, focus has
moved more towards the election and Supreme Court deliberations
rather than the economy," he added.
Flows into the dollar =USD helped up it rise for a fourth
straight day, leaving it on track to record its longest streak
of daily gains since June and now nearly 3% off its August lows.
"Have we overpriced the rebound in the economy? After the
stern warning from Clarida, I say we have," said Stephen Innes,
chief global markets strategist at AXI.
"I think the market was interpreting a bounce from the
bottom as a cyclical recovery, but I don't think we're there
yet. I still think there's a lot of blood on the street,
especially on Main Street."
Commodities priced in dollars fell as a result, with Brent
crude futures LCOc1 down 0.7% at $41.45 a barrel and gold
XAU= down 0.2% - on course for a fourth day of losses that
total nearly 7%.
The euro EUR= was flat at $1.1658.
"A stronger USD remains a significant headwind for commodity
markets, with investor appetite waning," ANZ analysts said in a
note.
With central bankers in focus globally, the chair of the
U.S. Federal Reserve will be closely watched later in the day
when he and a number of colleagues speak at the Senate Banking
Committee.
Elsewhere Bank of England Governor Andrew Bailey is also due
to speak, as is the European Central Bank's chief economist,
Philip Lane, ahead of the release of its latest Economic
Bulletin.
In emerging markets, both the Turkish and Mexican central
banks are set to decide on monetary policy. MSCI's Emerging
Markets Index .MSCIEF was down 1.8% at 0814 GMT.
Investors are waiting for weekly data due later on Thursday,
which is expected to show U.S. jobless claims fell slightly but
remained elevated, indicating the world's largest economy is far
from recovering.
In Europe, the German Ifo business climate indicator for
September is set to give a fresh read on Europe's biggest
economy, while French business confidence for September is also
out.
Rate decisions are also due in Switzerland and Norway, while
the ECB is also set to carry out its latest Targeted Longer-term
Refinancing Operation.

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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
MSCI Asia ex-Japan https://tmsnrt.rs/33WZp99
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