* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* MSCI ACWI flat
* Dollar dips 0.1%
* Gold gains over 0.5%
* Italian bonds rally after Italy cuts budget deficit target
By Ritvik Carvalho
LONDON, July 2 (Reuters) - World stocks eked out meagre
gains on Tuesday amid worries the global economy was faltering
after data showed manufacturing activity slowed last month,
weakening appetite for risk.
MSCI's All Country World Index .MIWD00000PUS , which tracks
stocks in 47 countries, was higher by 0.05% by midday in London,
up for a fourth straight day. Futures ESc1 indicated a lower
open for stocks on Wall Street.
Stocks had rallied globally on Monday after the United
States postponed imposing another round of tariffs on Chinese
products and the two countries agreed to continue negotiations
on trade.
But investors were skeptical of further gains for equities
after discouraging manufacturing surveys in the past 24 hours
and a U.S. threat of additional tariffs on European goods.
"It's clear that the tariffs already in place will continue
to take a toll on global and domestic growth, and with Trump now
turning his attention on Europe, the early bullish bias seems to
ease again," said Konstantinos Anthis, head of research at ADSS.
The pan-European STOXX 600 index was up 0.25%, although
plane maker Airbus AIR.PA dropped as much as 1% as the United
States stepped up pressure in the long-running dispute over
aircraft subsidies. .EU
The U.S. Trade Representative's office released a list of
additional products - including olives, Italian cheese and
Scotch whiskey - that could be subject to tariffs, on top of
products worth $21 billion that were announced in
April. "We've got the trade spat resurfacing between the U.S. and
EU, which is reiterating Trump's protectionist stance on trade,
and that is obviously not the kind of news you want to hear,"
said Florian Hense, European economist at Berenberg in London.
"The uncertainty about what could still come on trade causes
confidence to fall and investors to hold back on their
investment, which is a driver in markets today."
Earlier, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS added 0.39%, helped by a 1.17%
gain in Hong Kong shares .HSI as investors caught up to
Monday's global rally. Markets in Hong Kong had been closed on
for a holiday.
But Chinese blue chips .CSI300 were flat and Korean
shares .KS11 lost 0.36%. Japan's Nikkei .N225 finished up
0.11%.
Australian shares .AXJO were flat, pulling back from
earlier gains after the Reserve Bank of Australia cut its
benchmark interest rate by 25 basis points to a record low 1.0%,
as expected. However, the RBA left limited room for more cuts,
raising the possibility of unconventional policy easing.
The Australian dollar AUD= pulled up from recent lows to
gain 0.4% against the U.S. dollar at $0.6992.
The safe-haven yen strengthened against the dollar, which
fell 0.2% to 108.25 yen per dollar JPY= .
The dollar index, which tracks the dollar against major
rivals .DXY , was 0.1% lower at 96.749.
The euro got a brief boost after a media report that
European Central Bank policymakers are in no rush to cut
interest rates at a July policy meeting.
The single currency EUR=EBS edged up as much as 0.25% to
the day's highs at $1.1322 before retracing some of its rise to
stand 0.1% up on the day at $1.1300. FRX/
In debt markets, Italian government bonds rallied after
Italy cut its 2019 budget deficit target to avoid European Union
disciplinary action, potentially easing another major concern
for markets. GVD/EUR
Oil prices slipped as concerns that the global economy could
be slowing outweighed an agreement by producer club OPEC on
Monday to extend supply cuts until next March.
Brent crude LCOc1 fell 0.34% to $64.84 per barrel. U.S.
crude CLc1 fell 0.3% to $58.92 a barrel.
Spot gold XAU= added over half a percent to $1,392.36 per
ounce. GOL/
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Manufacturing slowdown https://tmsnrt.rs/2FMzK82
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