(Adds comment in paragraphs 7-8; gold, oil settlement prices; updates prices)
* Wall Street mixed after strong claims report
* Yields rise on expectations Fed to keep rates higher, longer
* Turkey's lira parked near record low ahead of rate decision
NEW YORK, July 20 (Reuters) - The dollar rallied and a gauge of global equities slid on Thursday after data once again highlighted persistent U.S. labor market strength, suggesting the Federal Reserve will keep interest rates higher for longer to curb inflation.
Fewer-than-expected Americans filed new claims for unemployment benefits last week, the Labor Department said, though the decline was likely exaggerated by difficulties adjusting the data for seasonal patterns.
Claims are well below the 280,000 level that economists say would signal a significant slowdown in job growth given the relative size of the U.S. labor market.
The dollar index rose 0.60% against a basket of trading currencies, while futures expect the Fed's overnight rate will rise to 5.42% in November and remain close to or above 5% until May 2024.
By contrast the equity market, driven by tumbling headline inflation numbers, expects the Fed to end its rate-hiking campaign at a two-day policy meeting that concludes July 26.
The jobless claims report, along with solid retail sales on Tuesday, pushed Treasury yields up on the idea that the Fed will keep rates higher for longer, said Ben Jeffery, a strategist on the U.S. rates team at BMO Capital Markets in New York.
"We still have some probability of another move in September or November," he said. "That's probably by the Fed's design. To keep financial conditions sufficiently tight to continue fighting inflation, they definitely want to make sure that there are no cuts priced in 2023."
The two-year Treasury yield, which typically moves in step with interest rate expectations, rose 7.5 basis points at 4.830%.
Colin Graham, head of multi-asset strategies at Robeco in London, said once rates peak, the only reason the Fed will cut them is if something bad happens.
"The structural view around inflation has to change. People are assuming that the Fed's done enough," he said. "Headline (inflation) is coming down due to food and energy. The core PCE hasn't changed and that's the Fed's preferred measure."
Graham referred to the Consumer Price Index (CPI), which year-over-year dipped below 3% in June, and the Personal Consumption Expenditures (PCE) Price Index. Core PCE is running at an annual rate of 4.6%-4.7% this year, more than double the Fed's 2% target.
The S&P 500 fell 0.57% and the Nasdaq Composite slid 1.85% on Wall Street as disappointing earnings from Netflix and Tesla weighed, while the Dow industrials rose 0.59%. MSCI's U.S.-centric gauge of stocks across the globe shed 0.51%.
In Europe, the pan-regional STOXX 600 index closed up 0.42% as a jump in metals prices, and a 2.3% leap in wheat after Russia struck Ukraine's ports, lifted mining and basic resource stocks more than 2%.
Earlier in Asia, equity and commodities markets had pockets of gains after China's government pledged additional support for its economy. However, its tech stocks slid again on festering property concerns.
China's yuan shot up after authorities tweaked cross-border financing rules and major state-owned banks were seen selling dollars. Turkey's lira was stuck near a record low as its second interest rate hike since President Tayyip Erdogan secured a third decade in power in May lagged expectations.
Investors are focused on the next moves by major economy central banks at meetings in Japan, Europe, the United States and Britain.
Bank of Japan Governor Kazuo Ueda said this week there was still some distance to sustainably and stably achieving the central bank's 2% inflation target, dousing speculation of a change to its "yield curve control" policy next week.
Traders and analysts expect the European Central Bank to raise its benchmark rate by 25 basis points next week, but what follows has been up for debate in the wake of a recent dovish tone taken by the central bank's policymakers.
FRAGILE CHINA
China stocks have been pressured in recent weeks by soft economic data, with investors waiting for meaningful stimulus to jump-start the country's stuttering post-pandemic recovery.
Daleep Singh, chief global economist at PGIM Fixed Income, said China's current recovery is unlike others as it relies on consumer-led growth following years of credit-fueled investment in property and infrastructure.
Oil prices edged higher on lower U.S. crude inventories and strong crude imports by China, but a weaker demand outlook kept investors cautious.
U.S. crude rose 28 cents to settle at $75.63 a barrel, while Brent settled up 18 cents at $79.64.
Gold prices slipped from a two-month high as the dollar and bond yields ticked higher.
U.S. gold futures settled 0.5% lower at $1,970.90 an ounce.
(Reporting by Herbert Lash, additional reporting by Marc Jones in London, Ankur Banerjee in Singapore; Editing by Sharon Singleton, John Stonestreet and Richard Chang)
