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GLOBAL MARKETS-Stocks slip amid lack of detail on trade deal

Published 14/10/2019, 09:44
© Reuters.  GLOBAL MARKETS-Stocks slip amid lack of detail on trade deal
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* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

* Investors caution on lack of detail in trade deal

* China trade data add to signs of weakness in economy

* Asian stocks gain, European shares fall

* Wall Street futures down 0.2%

By Ritvik Carvalho

LONDON, Oct 14 (Reuters) - A global index of stock markets

slipped on Monday as signs of progress in the China-U.S. trade

dispute drew mixed a reaction from investors, with some

cautioning over a lack of detail in the initial stages of the

agreement.

Stock markets in Asia cheered U.S. President Donald Trump's

outlining the first phase of an agreement to end a trade war

with China and suspending a threatened tariff hike European shares slipped.

The pan-European STOXX 600 index .STOXX was down 0.75% in

early trade in London.

Germany's DAX .GDAXI , dominated by companies exposed to

China, slipped 0.5%. All European country indexes were in the

red. .EU

MSCI's All-Country World Index .MIWD00000PUS , which tracks

shares across 47 countries, was down 0.06% on the day.

The emerging trade deal, covering agriculture, currency and

some aspects of intellectual-property protection, would

represent the biggest step by the two countries in 15 months.

But investors advised caution.

"While a positive development, we are not absolutely certain

that this marks the start of a clear de-escalation of the trade

dispute," said Mark Haefele, chief investment officer at UBS

Global Wealth Management. A number of issues were unresolved or

unclear, in his view.

"A delay to the scheduled December tariffs was not

announced, although that's likely if a deal is reached, and the

state of provisions on intellectual property, forced technology

transfer, and Chinese state subsidies, the most difficult

aspects of the negotiations, are still unclear."

Contributing to the gingerly reception of phase 1 of the

trade agreement were data showing a further contraction of

Chinese exports and imports in September. Liquidity was also lacking with Japan off and a

partial market holiday in the United States for Columbus Day.

Australia's main index gained 0.54% .AXJO and South Korea

.KS11 rose 1.11%. Shanghai blue chips .CSI300 added 1%.

E-Mini futures for the S&P 500 ESc1 were down 0.2% after

rising on Friday.

The drag from the trade war was a major reason Singapore's

central bank eased monetary policy on Monday for the first time

in three years. Data showed the city-state's economy had only

narrowly dodged recession. WEEK FOR BREXIT

The progress on trade was still enough to hit safe-haven

bonds. Yields on U.S. 10-year Treasury notes rose to 1.7530%

US10YT=RR .

The yield curve also steepened as short-term rates were held

down by news the Federal Reserve would start buying about $60

billion per month in Treasury bills to ensure "ample reserves"

in the banking system. The fading rally in risk assets as European markets opened

saw the Japanese yen regain ground against the dollar. The

currency was 0.2% higher to the dollar at 108.22 JPY= .

The dollar .DXY gained 0.2% against a basket of

currencies.

Sterling fell to $1.2556 GBP= , retreating from a 15-week

high of $1.2708 on Friday on optimism Britain could reach a deal

on Brexit with the European Union. However, both British and EU

officials said on Sunday more work would be needed to secure an

agreement. More talks will be held on Monday before a summit of EU

leaders in Brussels on Thursday and Friday.

Spot gold gained 0.05%, last trading at $1,490.20 per ounce

XAU= .

Oil prices pared gains made on Friday after reports that an

Iranian state-owned oil tanker had been attacked in the Red Sea.

Investors were also watching Turkey's incursion into Syria

as the White House threatened to impose sanctions on Ankara.

Brent crude LCOc1 futures eased 1.14% to $59.82 a barrel.

U.S. crude CLc1 lost 1.04% to $54.13 a barrel.

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