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GLOBAL MARKETS-Stocks meander on caution over trade talks, dollar gains

Published 14/10/2019, 16:46
© Reuters.  GLOBAL MARKETS-Stocks meander on caution over trade talks, dollar gains
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(Adds U.S. market open, changes dateline, previous LONDON)

* China trade data adds to signs of weakness in economy

* Asian stocks gain, European shares fall

By Herbert Lash

NEW YORK, Oct 14 (Reuters) - The U.S. dollar gained on

Monday as initial optimism ebbed over a potential U.S.-China

trade deal that President Donald Trump outlined last week, but a

gauge of global equity markets was little changed as investors

sought details.

Oil prices fell more than 3% as scant details about the

first phase of a Sino-U.S. trade deal undercut optimism over a

thaw in the dispute that has sparked a slowdown in global

growth.

A slide in Chinese exports picked up pace in September while

imports contracted for a fifth straight month, evidence of

further weakness in China's economy as tariffs take their toll.

China's exports fell 3.2% from a year earlier in September,

the biggest fall since February, customs data showed.

MSCI's gauge of stocks across the globe .MIWD00000PUS shed

0.05% while the FTSEurofirst 300 index .FTEU3 of leading

regional shares fell 0.43%.

Stocks traded near break-even on Wall Street. The Dow Jones

Industrial Average .DJI rose 18.71 points, or 0.07%, to

26,835.3. The S&P 500 .SPX lost 1.47 points, or 0.05%, to

2,968.8 and the Nasdaq Composite .IXIC added 2.25 points, or

0.03%, to 8,059.28.

"You're pivoting from what was trade escalation in August

and parts of September to trade de-escalation which markets

celebrated at the end of last week," said Michael Arone, chief

investment strategist at State Street Global Advisors in Boston.

"Now moving forward it's going to be about what exactly has

been agreed to?"

The U.S. benchmark S&P 500 ended Friday with its first

weekly gain in a month after Trump signaled the two sides had

taken the first major step in easing tit-for-tat measures.

Euro zone bond yields fell as caution regarding the trade

talks encouraged investors back into fixed income after a hefty

sell-off on Friday that sent borrowing costs to 2-1/2 month

highs.

Trading in U.S. Treasuries was closed for Columbus Day.

Earlier in Asia, stock markets cheered news of a trade

agreement. China's blue-chip CSI300 index .CSI300 gained 1.1%

while the Shanghai Composite Index .SSEC rose 1.2%.

Markets in Tokyo were closed.

The greenback, Swiss franc and Japanese yen all weakened as

optimism over the trade talks, together with the European Union

and Britain restarting Brexit negotiations, encouraged investors

into riskier assets.

The dollar index .DXY rose 0.22%, with the euro EUR=

down 0.18% at $1.102. The Japanese yen JPY= weakened 0.02%

versus the greenback at 108.45 per dollar.

Sterling fell about half a percent to $1.2588 GBP= ,

retreating from a 15-week high of $1.2708 on Friday, on optimism

Britain could reach a deal on Brexit with the European Union.

A Brexit deal was hanging in the balance after diplomats

indicated the EU wanted more concessions from Prime Minister

Boris Johnson and that a full agreement was unlikely this week.

Brent crude LCOc1 dropped $1.67 to $58.84 a barrel, while

U.S. West Texas Intermediate (WTI) crude CLc1 lost $1.47 to

$53.23 a barrel.

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