* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Trump tweets on lack of progress in Mexico talks
* Mexican peso takes added blow on Fitch downgrade
* Wagers on Fed rate cut underpin Wall St
* Oil bruised after falling to five-month low
By Wayne Cole
SYDNEY, June 6 (Reuters) - Asian shares got off to a
hesitant start on Thursday as investors feared a looming U.S.
trade war with Mexico would further depress global growth, even
as they wagered central banks would have to respond with fresh
stimulus.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS dipped 0.01% in sparse early trade. Japan's
Nikkei .N225 dithered either side of flat, while E-Mini
futures for the S&P 500 ESc1 eased 0.1%.
Sentiment soured after a meeting between U.S. and Mexican
officials ended with scant sign of progress. "Immigration discussions at the White House with
representatives of Mexico have ended for the day. Progress is
being made, but not nearly enough!" Trump said in a tweet on
Wednesday evening. Talks will resume on Thursday.
Mexican markets were dealt an additional blow when ratings
agency Fitch downgraded the country's credit rating to BBB,
while Moody's changed its outlook to negative from stable.
All of which saw the dollar jump 0.9% against a beleaguered
Mexican peso MXN= .
Wall Street had ended Wednesday in the black helped by
speculation the Federal Reserve would have to cut interest rates
as insurance against a tariff-driven slowdown. Such is the enthusiasm about rate cuts that a dismal reading
on U.S. private-sector jobs was greeted with cheer on Wall
Street as it seemed to add to the case for an early easing.
Two-year Treasury yields US2YT=RR struck their lowest
since December 2017 in response, while futures have priced in
around 68 basis points of easing by December. FEDWATCH
The Dow .DJI ended Wednesday up 0.82%, while the S&P 500
.SPX gained 0.82% and the Nasdaq .IXIC 0.64%.
WATCHING THE ECB
In currency markets, the safe-haven yen was again in demand
and nudged the dollar down 0.1% to 108.34 JPY= . The dollar
fared better against a basket of currencies to trade at 97.304
.DXY , having bounced from a seven-week low overnight.
The euro eased back to $1.1228 EUR= after briefly
stretching as high as $1.1306 on Wednesday.
Its near-term fortunes lie with the European Central Bank
which is expected to attempt to give an ailing economy a fillip
at a policy meeting later on Thursday.
At a minimum, the central bank will likely offer to pay
banks if they borrow cash from it and lend it out to households
and firms. "We expect the ECB to turn more dovish and push the euro
lower," said CBA FX analyst Joseph Capurso.
"We expect the ECB to change their forward guidance on
interest rates and to trim their macroeconomic projections and
modify their forward interest rate guidance because of low
inflation and heightened uncertainty about global trade."
In commodity markets, all the chatter of rate cuts helped
lift gold to 15-week highs and the precious metal was last
trading at $1,329.64 per ounce XAU= .
Oil nursed losses after diving overnight when the Energy
Information Administration (EIA) reported the largest build in
crude oil and oil product inventories since 1990. O/R
U.S. crude CLc1 was last down 10 cents at $51.58 a barrel
having hit its lowest since January, while Brent crude LCOc1
futures eased 15 cents to $60.48.
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(Editing by Sam Holmes)