(Adds quotes)

Nov 6 (Reuters) - The dollar surged and U.S. stock

futures hit record highs as investors bet on lower taxes and

higher interest rates as Republican Donald Trump was elected

U.S. president four years after he was voted out of the White

House.

MARKET REACTION AT 1008 EST

* The S&P 500 rose 1.7%, the small cap Russell 2000

soared 4.4%

* The yield on the 10-year U.S. Treasury note

hit a four-month high of 4.479%, and was last at 4.451%; the

2-year yield rose to a three-month high and was up

7.7 basis points to 4.273%.

* The U.S. dollar index was up 1.7%

* Bitcoin hit a record high of $75,389

* Europe's STOXX 600 down 0.6%

COMMENTS

MATTHEW RYAN, HEAD OF MARKET STRATEGY, EBURY

"So far, we would perhaps argue that the moves in the FX

market have been somewhat contained relative to expectations

from some quarters. It is very early days, however, and we would

expect volatility to remain elevated in the next few trading

sessions, as investors position themselves in anticipation of

another Trump presidency. This could mean fresh downside in risk

assets and another bout of dollar strength, particularly should

the Federal Reserve hint to markets at upcoming policy meetings,

potentially on Thursday, that the outcome of the election may

slow the pace of the Federal Reserve cutting cycle.

"For now, of course, nothing changes. President Biden

will remain in the top job until early next year, and we will

have to wait until 20th January 2025 for Trump's inauguration.

His rhetoric in the meantime will be closely watched by market

participants. Commentary that doubles down on his tariff threats

and tax cuts could conceivably exert some additional upward

pressure on the greenback, as investors pencil in weaker global

growth and a higher terminal Federal Reserve interest rate."

ANDRZEJ SKIBA, HEAD OF BLUEBAY U.S. FIXED INCOME, RBC

GLOBAL ASSET MANAGEMENT (emailed comments)

"These election results will be really bad for fixed

income and can unwind a lot of the bullishness in fixed income.

Trump keeps openly telling people that he will increase tariffs

not just on China but with every trade partner. We're talking

10% tariffs across all global partners. This is a big deal

because this could add 1% to inflation. If you add 1% to next

year's inflation numbers, we should say bye to rate cuts. With

higher tariffs, the Fed will not be in a position to cut rates

even if the economy is slowing down- and that is a toxic mix for

fixed income.

JACK MCINTYRE, GLOBAL FIXED INCOME PORTFOLIO MANAGER,

BRANDYWINE GLOBAL INVESTMENT MANAGEMENT

"The initial reaction is not surprising. This was sort

of a 50-50. The market is correctly saying we might see a red

sweep. Even if it's a narrow Republican majority (in the

Senate), somewhere out there there are Republicans that are

fiscally conservative.

"You're going to get some version of a repricing (of

Treasuries) just by nature of the math. It's just a question of

how long does it last. You're seeing the initial damage today.

"Volatility is important here. I suspect we could see a

decline in overall volatility.

"We're hesitant to buy or sell bonds. We're looking at

that 30-year auction today as a barometer of demand. I'm sitting

on my hands and seeing how things play out. Treasuries have had

a pretty good sell-off coming into this. Ultimately you're

making a bet that there is going to be some fiscal

responsibility coming out of the Trump administration."

DAVID BAHNSEN, CHIEF INVESTMENT OFFICER, THE BAHNSEN

GROUP, NEWPORT BEACH, CALIF.

"For now, investor sentiment is pro-growth,

pro-deregulation, and pro-markets, as seen in the overnight

market action. There is also an assumption that M&A activity

will pickup and that more tax cuts are coming or the existing

ones will be extended. This creates a strong backdrop for

stocks."

"Financials and Energy are the obvious beneficiaries of

Trump's victory amid hopes of deregulation and a greater focus

on U.S. energy independence. There may even be other sectors

that benefit from Trump's victory, such as technology stocks,

especially if the Federal Trade Commission (FTC) is knocked down

a peg. We need to see personnel and cabinet appointments in the

week ahead to get firmer ideas around all this, as personnel is

policy."

ELLIS PHIFER, MARKET STRATEGIST, RAYMOND JAMES

"Both parties are going to spend no matter what. This

Treasury sell-off is overdone. It's kind of a knee-jerk

reaction.

"(In terms of Fed policy) none of the presidents have

been silent on rates. It's going to be a '94-'95 scenario. They

used this term 'recalibrate'. It reminds me of a post-'94-'95

period where the Fed was tweaking back and forth to avoid a

recession.

"Trump's win is equally as surprising as in 2016. I know

all the votes aren't in, but his current lead in the popular

vote is to me the bigger surprise.

"I think we're all watching (the House elections) very

closely. It's always a critical component as markets tend to

like gridlock. They like it as business continues as usual.

JOHN FLAHIVE, HEAD OF FIXED INCOME, BNY WEALTH

"Inflation might be stickier than maybe would have been

without this political landscape, but I don't see us returning

to a post pandemic flare up ... It might suggest we take longer or

we may not get to the actual Fed's target of 2%, but ... the bias

is going to continue to be toward cutting"

HENDRIK DU TOIT, CEO, NINETY ONE:

"It's a completely new world, and we need to understand

that."

"He (Trump) has a massive endorsement and will move much

faster than before. The market will price that in very quickly.

What's really important here is the markets like clarity, and

they have that."

ANDREA SCAURI, SENIOR PORTFOLIO MANAGER, LEMANIK,

LUGANO:

"With Trump's victory, you'll get much stronger fiscal

policies compared to what might have been under a Democratic

administration. This will have repercussions for inflation, and

you can see that already with this morning's rise in Treasury

yields."

"So, who benefits from all of this? I think old-economy

sectors, like oil, drilling, mechanical, and heavy industry,

will benefit. And probably also tech, as the American consumers

will have more money in their pockets, they might spend it on

new phones, TVs, or invest in the stock market."

EMMANUEL CAU, HEAD OF EUROPEAN EQUITY STRATEGY,

BARCLAYS, LONDON:

"You have renewables, auto sector, some of the tariff

stocks and China-exposed names which are lagging, so even though

the market is going up, you are seeing some discrimination based

on some of the Trump policies."

"Roughly speaking, you have renewable and tariff trade

names underperforming, then you have your U.S. consumer and

dollar plays doing better. That seems to be the story now."

EMMANOUIL KARIMALIS, MACRO RATES STRATEGIST, UBS,

LONDON:

"We think that given Trump's key elements of his agenda

- tariffs on China and the rest of the world - the market is

just thinking this would obviously have an impact on China, and

Europe is a bit more sensitive to China. That would probably

have an impact on growth, so European rates (bonds) are

rallying."

"U.S. rates have obviously sold off given expectations

of more fiscal loosening in the U.S., and probably slightly

higher inflation due to tariffs."

"The fact that European rates have reacted sharply might

be a little bit overdone in my view, because we don't expect the

ECB to shift their expectations quickly."

DAVID ALLEN, PORTFOLIO MANAGER, PLATO GLOBAL ALPHA FUND,

SYDNEY:

"Markets absolutely crave certainty, if we'd had a long

contested result you would have seen price swings to the

downside in major markets...Trump's victory was also somewhat

priced in at the margins"

"I do think Trump 2.0 will be different from Trump 1.0... I

don't think Trump was even expecting to win the first time and

was less prepared. This time is different, I expect him to push

through a lot of fast major legislation within the first 100

days, so hold onto your hats."

ROGIER QUAEDVLIEG, SENIOR U.S. ECONOMIST, ABN AMRO RESEARCH,

AMSTERDAM

"Given the inflationary expectations associated with Trump's

economic and fiscal policies, we expect U.S. rates to continue

rise across the yield curve. We anticipate that the market will

further retrace expectations for Fed rate cuts next year due to

increased inflation projections, while also pricing in higher

term premiums.

"However, our economic analysis suggests that the full

implementation of Trump's policies - especially the tariffs -

will eventually weigh heavily on the US economy."

"Trump's universal tariffs plan is also expected to have a

substantial impact on the already fragile euro zone economy,

while the inflationary effects for Europe will be more limited.

This could trigger an even more accelerated rate cutting cycle

path from the ECB and will likely lead to a greater divergence

between the US and European policy rates."

ANDRZEJ SZCZEPANIAK, EUROPEAN ECONOMIST, NOMURA, LONDON:

"In summary: It's bad news for Europe."

"Trump winning means tariffs which will adversely affect

growth in Europe. The European Commission is expected to

retaliate like-for-like, which could mean higher inflation in

the euro area - or, as manufacturing firms' pricing power is so

diminished, as we have been flagging for some time, firms could

be forced to absorb these higher costs, which in turn may result

in some firms shuttering and unemployment rising, thus weighing

more heavily on growth."

KEN PENG, HEAD OF ASIA INVESTMENT STRATEGY, CITI WEALTH,

HONG KONG

"A lot of this is based on investors' view that Trump would

cut taxes or at least keep tax rates low. Now that it's likely

to be looking like a red sweep - additional cuts are possible.

"Deregulation is another major positive for the economy and

markets, particularly for the financial, energy and tech

sectors. The negatives are tariffs. That's going to be negative

for global growth, you know, particularly in China, Asia

(and)Europe... you see inflation expectations rise.

"I think the market is currently still just enjoying the

positive aspects of a red sweep, but I think as time passes, you

are likely to see the risks ... get priced in."

NAKA MATSUZAWA, CHIEF MACRO STRATEGIST, NOMURA, TOKYO:

"I think the market was not yet ready for a 'red sweep'...

if the 'red sweep' materialises, 10-year yields for U.S.

Treasuries could go up to as high as 4.50% and above. Dollar/yen

could go over 155. They're kind of half pricing in that level

right now.

"If Trump can pass tax and spending bills first, then he

doesn't have to rush for the hardline policies against China,

which come rather later. If Congress is controlled by

Republicans Trump can prioritise economic stimulus measures."

RONG REN GOH, PORTFOLIO MANAGER, EASTSPRING INVESTMENTS,

SINGAPORE:

"With Trump, market volatility is likely to pick up, so

trading-wise, it does open up opportunities. The volatility

comes from uncertainty surrounding how he intends to follow

through on some of his campaign promises.

"Right now the markets are focusing narrowly on the prospect

of tariffs, because it is the easiest lever to pull directly

under a presidential executive order, but we've seen between

2016 and 2020 other levers that can be pulled to contain China.

"From this perspective, I think a foreign investor is likely

to position more defensively towards China-focused risk."

WONG KOK HOONG, HEAD OF EQUITY SALES TRADING, MAYBANK,

SINGAPORE:

"Carnage in HK/China hasn't really materialised because

traders and investors are still awaiting any possible (stimulus)

announcements.

"As for the next four years in general, for a start we may

need to download Truth Social app."

GARY NG, SENIOR ECONOMIST, NATIXIS, HONG KONG:

"As Trump's policies in trade tariffs and tax cuts may lead

to higher inflationary pressure and a wider fiscal deficit, the

Fed may be less dovish than before.

"Therefore, the yuan can face higher pressure."

(Compiled by the Global Finance & Markets Breaking News team;

Editing by Raju Gopalakrishnan, Clarence Fernandez and Catherine

Evans)