GLOBAL MARKETS-Stocks wobble on trade, earnings unease; US Treasury yields fall

* All Wall St indexes down; CSX tumbles on trade-related
weakness
* Treasury yields slump; 10yr, 30yr shed over 7 bps each
overnight
* Bank of Korea surprises with earlier-than-expected rate
cut
* Precious metals in demand; gold at 2wk high, silver at
5mth high
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Tomo Uetake
TOKYO, July 18 (Reuters) - Asian shares edged lower on
Thursday as Wall Street stocks dropped on early signs that the
U.S.-China trade war could hurt corporate earnings, which helped
underpin solid demand for safe-haven U.S. Treasuries.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS eased 0.2%, while Japan's benchmark Nikkei
.N225 shed 1.7% and Australian shares .AXJO fell 0.3%.
Chinese shares followed the suit, with the benchmark
Shanghai Composite .SSEC and the blue-chip CSI 300 .CSI300
down 0.7% and 0.6%, respectively, while Hong Kong's Hang Seng
.HSI retreated 0.5%.
South Korea's market .KS11 was off 0.4% after the Bank of
Korea unexpectedly cut its policy interest rate for the first
time in three years, as uncertainties from a trade dispute with
Japan added to anxiety about the economy's outlook. On Wall Street, all three major indexes fell on Wednesday as
weak results from trade-related CSX Corp CSX.O stoked concerns
that the protracted trade standoff between the United States and
China could hurt U.S. corporate earnings. Earlier in the week, U.S. President Donald Trump kept up
pressure on Beijing with a threat to put tariffs on another $325
billion of Chinese goods, amid market nervousness over when
face-to-face talks will resume. The Wall Street Journal reported that progress toward a
U.S.-China trade deal has stalled while the Trump administration
determines how to address Beijing's demands that it ease
restrictions on Huawei Technologies. The Dow Jones Industrial Average .DJI fell 0.4%, the S&P
500 .SPX lost 0.7% and the Nasdaq Composite .IXIC dropped
0.5%. .N
Netflix Inc NFLX.O shares tumbled in after-market trade
after the world's dominant subscription video service lost U.S.
streaming customers for the first time in eight years and missed
targets for new subscribers overseas, raising worries in an
already nervous the market. Treasury yields slid as concerns about the U.S.-China trade
war boosted demand for safe haven debt and after data showed
weakness in the U.S. housing market.
Yields on benchmark 10-year and 30-year bonds climbed more
than seven basis points each, to 2.06% and 2.57%, respectively.
U.S. homebuilding fell for a second straight month in June
and permits dropped to a two-year low, suggesting the housing
market continued to struggle despite declining mortgage rates.
In the foreign exchange market, the dollar nursed light
losses on Thursday, weighed down by lower U.S. yields and a
rebound by the pound from 27-month lows.
The International Monetary Fund (IMF) on Wednesday said the
dollar was overvalued by 6% to 12%, based on near-term economic
fundamentals. The dollar index .DXY versus a basket of six major
currencies was not much changed at 97.099 after shedding 0.2%
the previous day.
The euro EUR= also was nearly flat at $1.1238 after
crawling up marginally 0.1% on Wednesday. The greenback fell
0.2% to 107.72 yen JPY= , extending an overnight loss of 0.3%.
Sterling GBP=D4 was steady at $1.2437. It had stumbled to
$1.2382 overnight, its lowest level since April 2017 on concerns
of a no-deal Brexit.
"Risks of a no-deal Brexit have increased to worryingly high
levels. Investors should be concerned," said Seema Shah,
London-based chief strategist at Principal Global Investors.
"In the scenario where a no-deal Brexit becomes a realistic
prospect, the continued decline in sterling will be just a drop
in the ocean."
Britain's fiscal watchdog is expected to say on Thursday the
country's economy will fall into a recession next year and that
its economy will be 3% smaller in the event of a "no-deal"
Brexit, The Times newspaper reported. Precious metals were in demand, with gold prices hitting
their highest in two weeks on Thursday, as weaker-than-expected
U.S. data reinforced expectations for an interest rate cut by
the U.S. Federal Reserve later this month, dragging the dollar
lower. GOL
Spot gold XAU=EBS gained as much as 0.2% to hit $1,429.10
per ounce, its highest level since July 3. Silver XAG=EBS
climbed as much as 1.0% to 16.12, its highest level since
February, extending gains for a fourth straight session.
Oil prices steadied on Thursday after falling in the
previous session when official data showed U.S. stockpiles of
products like gasoline rose sharply last week, suggesting weak
demand during the peak driving season. O/R
Brent crude futures LCOc1 were up 0.3% to $63.86 a barrel,
while U.S West Texas Intermediate (WTI) crude futures CLc1
edged up 0.1% to $56.84 a barrel.