News: NAB GLOBAL MARKETS-Nasdaq falls with U.S. dollar, oil rises ahead of Fed meeting

(Updates after U.S. market open, adds commentary, pvs LONDON)

• U.S. stocks chop around with Nasdaq weakest
• Euro zone survey shows German morale dropping
• Fed in focus with two-day policy meeting on Tuesday
• Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
• Graphic: World FX rates http://tmsnrt.rs/2egbfVh

U.S. equities were choppy on Monday with Nasdaq .IXIC in decline ahead of a big week of technology earnings reports while oil prices rose and treasury yields edged higher as investors braced for a Federal Reserve interest rate hike later this week.

In currencies, the dollar index was down but holding above a 2-1/2 week low reached on Friday while gold prices inched higher.

Janet Yellen, the U.S. Treasury Secretary, said on Sunday that while U.S. economic growth was slowing a recession was not inevitable.

Treasury yields edged slightly higher as investors awaited the Federal Reserve's likely 75-basis-point interest rate increase later this week amid growing concerns about an economic slowdown and the potential for recession.

The gap between yields on two- and 10-year Treasury notes US2US10=RR, seen as an indication of a looming recession when the short-end yield is higher than the long end, has been inverted for more than two weeks and was at -18.9 basis points.

"This is the first meaningful yield curve inversion we've had since 2006 for any period of time," said David Petrosinelli, senior trader at InspereX, adding that this fed into a generally accepted narrative of a slowdown at the very least.

While the Dow was virtually unchanged, Nasdaq was falling as investors awaited earnings from some of the biggest U.S. companies, including Apple AAPL.O and Microsoft MSFT.O , and the Fed decision.

The Dow Jones Industrial Average .DJI rose 57.85 points, or 0.18%, to 31,957.14, the S&P 500 .SPX gained 0.14 points, or 0.00%, to 3,961.77 and the Nasdaq Composite .IXIC dropped 73.65 points, or 0.62%, to 11,760.46.

The pan-European STOXX 600 index .STOXX rose 0.03% and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.13%.

Earlier, a widely watched survey showed German business morale falling more than expected in July as high energy prices and looming gas shortages push Europe's largest economy towards a recession.

The German data had weighed on investor moods in Europe along with a slew of downbeat earnings and a survey over the weekend that showed some industrial companies in Germany cutting production in reaction to soaring energy prices.

Benchmark 10-year notes US10YT=RR last fell 7/32 in price to yield 2.805%, from 2.781% late on Friday. The 2-year note US2YT=RR last fell 1/32 in price to yield 3.0118%, from 2.991%.

"Pre-Fed caution is keeping the dollar off its highs. The market is going to be eager to see if the run of softer data has in any way changed the Fed’s hawkish rate path," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington, DC.

"The economy continues to show pretty solid underlying momentum but at the same time, high inflation, rising interest rates, they are certainly having an impact on the economy."

Oil prices rose on Monday, bolstered by a slightly weaker U.S. dollar while investors seesawed between supply fears and expectations that rising U.S. interest rates would weaken demand.

U.S. crude CLc1 recently rose 1.17% to $95.81 per barrel and Brent LCOc1 was at $104.26, up 1.03% on the day.

Spot gold XAU= dropped 0.7% to $1,715.29 an ounce. U.S. gold futures GCc1 gained 0.08% to $1,728.50 an ounce.

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Global FX performance	http://tmsnrt.rs/2egbfVh 

Global asset performance http://tmsnrt.rs/2yaDPgn PMIs https://tmsnrt.rs/3PwcrRD

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