Global Markets Lower as Trade Deal Optimism Loses Steam; U.S. Data Eyed
By Dow Jones Newswires StaffU.S. stock futures pointed to a lower open Thursday, and the dollar continued to fall while Treasury yields stabilized ahead of data including retail sales and producer prices.Some of the optimism around trade deals that had resulted in a recent bounce in stock markets appeared to be running out of steam, even as President Donald Trump on Thursday said India offered the U.S. a no-tariff deal.U.S. Treasury yields stabilized in early European trade after slight increases on Wednesday. The two-year Treasury yield was flat at 4.047% and the 10-year yield was also unchanged at 4.530%, according to LSEG, after settling above 4.5% for the first time since February.The dollar fell amid continued speculation in foreign exchange markets that Trump could seek agreements with other countries to devalue the dollar as part of trade deals. Reports that the U.S. and South Korea discussed exchange rate polices last week "should be enough to set a few alarm bells ringing," said Pepperstone strategist Michael Brown in a note.If the Trump administration were able to engineer a weaker dollar through deals with other trading partners, the Federal Reserve is unlikely to cut interest rates given the prospect of higher import costs, he says. The DXY Dollar Index against a basket of major currencies was last down 0.4% to 100.686.U.S. stock futures for the Dow Jones Industrial Average were down 0.6% early in Europe, S&P 500 futures were down 0.5% and Nasdaq futures also fell 0.5%.In global equity markets, shares in Asia mainly closed lower due to continued profit-taking following recent session gains. Japan's Nikkei closed nearly 1.0% lower on weak earnings. In South Korea, the Kospi declined by 0.7%. Mainland China shares were also weak ahead of industrial and retail sales data due on Monday. European stock markets opened lower, with the Stoxx Europe 600 starting down 0.5%, while Germany's DAX and London's FTSE 100 both fell 0.4%.Oil prices slumped on concerns of weaker demand and a stalling risk-on sentiment, and as Trump said Iran was close to a nuclear deal. Brent crude was last down 3.1% at $64.06 a barrel, while WTI fell 3.3% to $61.08 a barrel.Gold futures were down 1.3% at $3,145.80 a troy ounce, the lowest level since April 10.Write to Barcelona Editors at [email protected]