* Aussie dollar poised for biggest one-day drop since Nov. 2016
* No big surprises from State of the Union address
* U.S. dollar index firms for 5th straight session
* European equities slightly higher on bank lift (Updates with afternoon U.S. trading)
By Chuck Mikolajczak and Lewis Krauskopf
NEW YORK, Feb 6 (Reuters) - The Australian dollar tumbled on Wednesday after its central bank signaled a possible interest-rate cut in the latest indication a global economic slowdown is tilting policymakers towards looser monetary policy, while a gauge of world equity markets edged back from two-month highs.
Wall Street's benchmark S&P 500 slipped on concerns over growth, disappointing earnings reports and another possible U.S. government shutdown in the wake of President Donald Trump's State of the Union address on Tuesday. European shares gained slightly. central bank was the latest to signal policy easing in the face of economic headwinds. Last week, the U.S. Federal Reserve said it would be patient with regard to further rate hikes, while the European Central Bank also sounded less certain that it will start tightening policy later this year. about-face pushed the Australian dollar AUD= down 1.65 percent against the U.S. dollar, putting it on track for its biggest daily drop since November 2016. In turn, the U.S. dollar moved higher against a basket of major currencies. are starting to see central banks follow (Fed Chair Jerome) Powell's lead," said Chris Gaffney, president of world markets at TIAA Bank in St. Louis. "That's what's actually contributed to this dollar rally that we have seen recently."
The dollar index .DXY , tracking the unit against six major currencies, rose 0.31 percent, with the euro EUR= down 0.4 percent to $1.1366. The index was on pace for a fifth day of gains.
In his address, Trump vowed to build a wall at the U.S.-Mexico border, a divide with Democrats that had led to the previous 35-day partial government shutdown. he wasn't confrontational, he still didn't reach out an olive branch across the aisle in any manner. Both sides still seem dug in, so there's a real fear that we are going to head toward another government shutdown," said Gaffney.
The Dow Jones Industrial Average .DJI rose 11.84 points, or 0.05 percent, to 25,423.36, the S&P 500 .SPX lost 3.06 points, or 0.11 percent, to 2,734.64 and the Nasdaq Composite .IXIC dropped 15.83 points, or 0.21 percent, to 7,386.25.
Shares of videogame makers Electronic Arts EA.O and Take-Two Interactive Software TTWO.O tumbled after their respective forecasts sparked concerns. stocks were buoyed by gains in Italian banks and tech stocks. pan-European STOXX 600 index .STOXX rose 0.15 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.19 percent.
Benchmark U.S. 10-year notes US10YT=RR last rose 1/32 in price to yield 2.7018 percent, from 2.704 percent late on Tuesday.
Signs of strong U.S. demand for distillate products and tightening global crude supply boosted oil prices but gains were capped by a rising U.S. dollar and ongoing concerns about a global economic slowdown. crude CLcv1 rose 0.56 percent to $53.96 per barrel and Brent LCOcv1 was last at $62.55, up 0.92 percent on the day.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC-Global assets in 2019
http://tmsnrt.rs/2jvdmXl GRAPHIC-World FX rates in 2019
http://tmsnrt.rs/2egbfVh GRAPHIC-Asia-Pacific equities performance in 2019
https://tmsnrt.rs/2HLNW4z GRAPHIC-All aboard the Emerging Market express
https://tmsnrt.rs/2SnJk97
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Bernadette Baum and Nick Zieminski)