* 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) - 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 0.03% by 0728 GMT, up for
a fourth straight day.
Stocks had rallied globally 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 0.2%, although plane
maker Airbus AIR.PA dropped 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. The new U.S. tariff threats against Europe also point to a
worrisome prospect of a broadening trade dispute, said Michael
McCarthy, chief markets strategist at CMC Markets in Sydney, in
a note to clients.
"The problem is the widening of the dispute. Europe, the
U.S. and China account for almost two thirds of global GDP," he
said. "An ongoing disruption to trade between these three major
economies, prosecuted for domestic political purposes, could
sink global growth."
E-mini futures for the S&P 500 index of stocks ESc1 were
lower.
Earlier, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS added 0.28%, helped by a 1.23%
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 dipped 0.13% and Korean
shares .KS11 lost 0.3%. 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 0.32% against the U.S. dollar at $0.6985.
The safe-haven yen strengthened against the dollar, which
fell 0.2% to 108.24 yen per dollar JPY= , and the euro EUR=
was flat at $1.1288. The dollar index, which tracks the dollar
against major rivals .DXY , was 0.1% lower at 96.758.
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
In commodity markets, oil gained as OPEC agreed to extend
supply cuts until next March, although prices were pressured by
worries demand may ease amid hints of a slowdown in the global
economy.
Brent crude LCOc1 was up 0.3% at $65.25 per barrel. U.S.
crude CLc1 rose 0.1% to $59.15 a barrel.
Spot gold XAU= added over half a percent to $1,392.11 per
ounce. GOL/
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Manufacturing slowdown https://tmsnrt.rs/2FMzK82
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