NEW YORK, Nov 12 — The dollar slid and global equity markets fell yesterday after US President Donald Trump’s remarks over the weekend dashed investor optimism that Washington and Beijing would soon reach a deal to end their debilitating trade war.
Moody’s warning on Britain’s sovereign debt weighed on shares in London, while escalating violence in Hong Kong led Asian equities to their biggest daily decline since August, boosting demand for the safe-haven yen and Swiss franc.
Trump said on Saturday that the US-Sino trade talks were moving along “very nicely” but more slowly than he would have liked. He also said there had been incorrect reporting about US willingness to lift tariffs.
Last week, US and Chinese officials said they had agreed to roll back tariffs — a key consideration for China — that already are in place in a “phase one” trade deal.
The 16-month trade war between the world’s two largest economies has slowed global growth. Data over the weekend showed that China’s producer prices fell the most in more than three years in October.
“It’s difficult to say who stands to lose more from this deal falling apart, but this last-minute jostling does not inspire confidence,” said Craig Erlang, senior market analyst at PANDA Corp.
“We swing from optimism to pessimism on a daily basis and never feel any the wiser,” Erlang said.
US stocks ended last week at record closing highs, capping a rally that had lifted the S&P 500 more than 7 per cent since early October. MSCI’s gauge of equity performance in 47 countries closed last week barely 1 per cent off a record high.
The MSCI all-country world index shed 0.27 per cent, while the FTSEurofirst 300 index of leading regional shares closed down 0.04 per cent.
On Wall Street, the Dow Jones Industrial Average rose 9.77 points, or 0.04 per cent, to 27,691.01. The S&P 500 lost 6.09 points, or 0.20 per cent, to 3,086.99 and the Nasdaq Composite dropped 11.04 points, or 0.13 per cent, to 8,464.28.
The Dow Jones Industrial Average eked out a modest gain after shares of Boeing Co jumped 4.55 per cent after it said US regulators are expected to approve the return to commercial service of its grounded 737 MAX jet in coming weeks.
The US dollar, which often acts as a safe-haven asset when political and economic uncertainty reigns, was lower against the yen and the Swiss franc, other traditional safe havens.
The dollar index fell 0.14 per cent, with the euro up 0.14 per cent to US$1.1032 (RM4.57). The yen strengthened 0.16 per cent versus the greenback at 109.06 per dollar, while the dollar was 0.4 per cent weaker against the franc, at 0.9933 per dollar.
Gold fell to its lowest in more than three months.
US gold futures settled down 0.4 per cent at US$1,457.10 an ounce.
Oil prices slid as trade worries offset industry data showing a drop in US crude inventories at the Cushing, Oklahoma, delivery point.
Brent crude fell 33 cents to settle at US$62.18 a barrel. US crude settled down 38 cents at US$56.86 a barrel.
A sell-off in southern European bond markets pushed yields higher, with the inconclusive election in Spain adding to uncertainty.
Government bond markets across the single-currency bloc have been hurt in recent weeks by optimism over a US-China trade deal and improving economic data.
US Treasury markets were closed for the Veterans Day holiday. — Reuters