* Global stocks retreat from record high
* Markets await Fed minutes for rate hike clues
* Dollar index advances ahead of Fed minutes
* Bond yields waffle on uncertainty over French election (Update market action, change dateline, previous LONDON)
By Richard Leong
NEW YORK, Feb 22 (Reuters) - Global stocks pulled back from record highs on Wednesday while the dollar rose ahead of minutes from the U.S. Federal Reserve’s January policy meeting, which could offer clues about the next interest rate rise.
A stronger greenback weighed down oil, metal and other commodity prices.
U.S. and German bond yields initially fell on safe-haven demand, stoked by jitters about the first round of the presidential election in France where polls showed anti-EU, anti-immigrant candidate Marine Le Pen leading. They reversed after centrist candidate Francois Bayrou offered his backing to independent candidate Emmanuel Macron in a bid to bolster Macron’s chances of defeating Le Pen.
“This is politics, as well as markets increasingly betting on an imminent rate hike by the Fed,” said Commerzbank strategist Thu Lan Nguyen in Frankfurt. “Volatility is rising as investors start to prepare for the elections.”
MSCI’s main index of global stocks, which tracks share prices across 46 countries, hit a second successive record high at 446.60 earlier Wednesday. Its gain faded with a weaker open on Wall Street and lower European mining stocks.
Relatively strong earnings seasons in Europe and the United States, strong economic data, and U.S. President Donald Trump’s promises of tax reform, less regulation and more infrastructure spending have all helped lift stocks this year.
In late morning trading, the Dow rose 8.08 points, or 0.04 percent, to 20,751.08, the S&P 500 lost 2.52 points, or 0.11 percent, to 2,362.86 and the Nasdaq Composite dropped 7.42 points, or 0.13 percent, to 5,858.53.
The Dow, S&P 500 and Nasdaq had hit record closing highs on Tuesday.
Europe’s broad FTSEurofirst 300 index added 0.10 percent, at 1,473.32.
The day’s most anticipated event for markets will be the release of the minutes of the Fed’s last policy meeting at 2 p.m. ET (1900 GMT).
Fed Chair Janet Yellen said last week it was likely the central bank would need to raise rates at an upcoming meeting. Markets have priced in only a slim chance of a rise next month but a much greater likelihood by June.
The dollar held steady against a basket of major currencies , last up 0.1 percent at 101.42.
Concerns about sweeping changes from major elections across Europe, and the prospect of higher U.S. rates, pushed the gap between short-dated U.S. and German government bond yields to its widest in nearly 17 years.
German two-year yields hit a record low of minus 0.919 percent before bouncing to minus 0.892 percent. U.S. two-year yield hit 1.208 percent before retracing to 1.220 percent, Reuters data showed.
In the oil market, Brent crude was last down 85 cents, or 1.5 percent, at $55.81 a barrel. U.S. crude was last 80 cents, or 1.47 percent, lower at $53.53 per barrel.
Spot gold prices fell $1.84 or 0.15 percent, to $1,234.06 an ounce.
Additional reporting by Nigel Stephenson in London; Shinichi Saoshiro in Tokyo; Editing by Tom Heneghan and Nick Zieminski