(Updates prices, adds lira)
* Bank shares hit by prospect of lower rates
* Focus shifting to Fed minutes, Jackson Hole symposium
* Brent prices reverse to trade higher; WTI little changed
By Rodrigo Campos
NEW YORK, Aug 20 (Reuters) - Traditional safe-havens
including the Japanese yen and U.S. Treasuries were sought out
on Tuesday even as there were signs that more economic stimulus
was on its way, as traders focused on concerns over a global
deceleration.
The prospect of new elections in Italy after the announced
resignation of Prime Minister Giuseppe Conte added to global
uncertainties, but Italian markets have been jittery over
infighting within the coalition and Italian yields fell after
the announcement. The key for markets now is whether pledges for more
accommodative policy from Germany to China are enough to assuage
concerns about the state of the global economy and end fears of
recession.
The immediate focus shifts to the minutes of the U.S.
Federal Reserve's most recent meeting, due on Wednesday. Traders
are also awaiting the Fed's Jackson Hole seminar and a Group of
Seven summit this weekend for clues on what additional steps
policymakers will take to boost economic growth.
"Market expectations for Jackson Hole and the central
banking community in aggregate are extremely dovish," said Brad
Bechtel, managing director at Jefferies in New York. "The U.S.
market is pricing a tremendous amount of easing now, along with
many other markets around the world. The market is literally
trying to force the hand of the central banking community."
Weighed by the prospect of even lower interest rates, bank
shares were among the largest decliners on Wall Street .SPXBK
and in Europe .SX7P .
The Dow Jones Industrial Average .DJI fell 98.13 points,
or 0.38 percent, to 26,037.66, the S&P 500 .SPX lost 16.38
points, or 0.56 percent, to 2,907.27 and the Nasdaq Composite
.IXIC dropped 38.33 points, or 0.48 percent, to 7,964.48.
The pan-European STOXX 600 index .STOXX lost 0.68 percent.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.30 percent after two sessions of gains over 1%.
Emerging market stocks rose 0.32 percent boosted by
overnight gains in South Korea.
The prospect of more central bank easing drove yields lower,
Benchmark U.S. 10-year notes US10YT=RR last rose 13/32 in
price to yield 1.5555 percent, from 1.598 percent late on
Monday. Financial markets went into a tailspin last week after U.S.
2-year yields traded above those of 10-year paper, an inversion
that has presaged previous recessions and is widely watched by
markets.
The dollar fell against major currencies, in line with the
drop in Treasury yields. The dollar index .DXY fell 0.19 percent, with the euro
EUR= up 0.23 percent to $1.1101.
The Japanese yen strengthened 0.34 percent versus the
greenback at 106.29 per dollar, while Sterling GBP= was last
trading at $1.2169, up 0.36 percent on the day.
The Turkish lira touched its lowest level in nearly a month
and recently fell 1.02 percent versus the greenback at 5.73 per
dollar after the central bank reduced the required reserves
ratio for certain lenders in a move seen as encouraging more
loans.
Oil prices rose as stimulus hopes offset concerns over
future demand and helped reverse early losses. U.S. crude CLc1 fell 0.05 percent to $56.18 per barrel and
Brent LCOc1 was last at $59.99, up 0.42 percent on the day.
Spot gold XAU= added 0.8 percent to $1,506.44 an ounce on
bets on further rate cuts at the Fed and on growth
concerns.
Global assets in 2019 http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets in 2019 http://tmsnrt.rs/2ihRugV
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