Global shares lose steam on weak U.S. retail sales, Brexit in focus
By Hideyuki Sano TOKYO (Reuters) - Global stocks barely moved on Thursday as soft U.S. retail sales data raised concerns about the health of the world's largest economy and risk of global recession, while sterling was volatile as negotiations on a Brexit deal continued. Both MSCI's broadest index of Asia-Pacific shares outside Japan and Japan's Nikkei were little changed in early trade while U.S
By Hideyuki Sano
TOKYO (Reuters) - Global stocks barely moved on Thursday as soft U.S. retail sales data raised concerns about the health of the world's largest economy and risk of global recession, while sterling was volatile as negotiations on a Brexit deal continued.
Both MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> and Japan's Nikkei <.N225> were little changed in early trade while U.S. stock futures
The S&P 500 <.SPX> shed 0.20% the previous day after data showed U.S. retail sales contracted in September for the first time in seven months, in a potential sign that manufacturing-led weakness could be spreading to the broader economy.
"It looks like the trade war has claimed yet another victim, in addition to diminished business confidence and reduced investment spending, as consumers are starting to chicken out," said Chris Rupkey, chief financial economist at MUFG Union Bank.
Given U.S. consumption has been one of few remaining bright spots in the global economy, the data fanned worries about a global recession.
U.S. Treasury Secretary Steven Mnuchin said on Wednesday that U.S. and Chinese trade negotiators were working on nailing down a Phase 1 trade deal text for their presidents to sign next month.
But he also said there were no plans for another high-level meeting on the trade deal outlined last week.
"While the U.S. suspended a hike in tariffs, it hasn't gone as far as scrapping the tariffs altogether, so it is hard to expect a quick pick-up in the economy," said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.
Losses in equities were offset by a solid start to the earnings season, though that is partly because investors have already marked down their expectations substantially, with earnings for S&P 500 companies expected to show a decline of 3% for the quarter, according to Refinitiv data.
Bank of America
In the currency market, soft U.S. retail sales took the shine out of the dollar.
The dollar index <=USD> fell 0.30% on Wednesday and last stood at 97.964, having touched its lowest since Aug. 27.
Against the yen the dollar slipped to 108.73 yen
The euro stood at $1.1075
Sterling traded at $1.2823
It has risen more than 5% in the past five sessions on the prospect that the United Kingdom and the European Union can strike a fresh deal to avoid a no-deal exit in the summit on Thursday and Friday.
Investors have welcomed optimistic comments from key officials during last few days. British culture minister Nicky Morgan said late on Wednesday there is a good chance of a deal.
Still, many doubts remained, not the least of which is if British Prime Minister Boris Johnson can ensure his government and factious parliament approve the plan.
In one sign of investor caution, in currency option markets, risk reversal spreads in sterling
The Turkish lira steadied off seven-week lows as U.S. President Donald Trump's sanctions for Turkey's military incursion into Syria were perceived to be lighter than expected.
Lira bears also suffered a flashback of their suffocating March squeeze as the authorities moved to keep a lid on volatility by restricting the supply of lira to overseas counterparts.
The lira stood at 5.8825 per dollar
Oil prices eased after U.S. data showed a larger-than-expected build in U.S. crude stocks.
(Additional reporting by Tomo Uetake in Sydney, Editing by Jacqueline Wong)
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By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.