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LONDON (Reuters) – Global stocks lost on Wednesday after two days of gains in the face of growing concern over global growth and trade, but the pound sterling rose 0.5% on optimism. according to which legislators were about to dismiss a Brexit without agreement.
FILE PHOTO: The London Stock Exchange Group's offices are visible in London on December 29, 2017, in London. REUTERS / Toby Melville
European stocks opened lower, unable to break the dark atmosphere of Asian trading. Last week's optimism over the US-China trade talks faded after US Trade Representative Robert Lighthizer said it was unclear whether the differences between the two parties could be filled.
The data continues to reinforce the picture of a slowdown in the global economy. Machine orders in Japan fell in January at the fastest pace in four months, bringing the Nikkei down more than 1%.
Australia also continued its momentum, posting a consumer confidence index in March. Monthly inflation in the United States has increased, according to Tuesday's data, but the increase was the lowest since September 2016.
This made the stock markets nervous. The MSCI equity index for the Asia-Pacific region lost 0.3%, although a pan-European benchmark rose slightly. German and French indices slipped 0.2%. Wall Street was ready for a more open and open-ended show.
"The markets are still hoping for a trade deal between the United States and China. My concern is that it will not necessarily come to the rescue of the weak economy …, "said Steve Barrow, G10 strategist at Standard Bank. "This means that riskier financial assets like stocks are going to have trouble starting here."
All of this prevented the MSCI World Index from reaching the four-and-a-half-month high that it had reached when Washington and Beijing seemed close to a trade deal. The index did not rise in March after two months of gains
British political chaos also weighs on sentiment. It was not possible to agree on the exit of the European Union before March 29th. On Tuesday, lawmakers defeated Prime Minister Theresa May's agreement on Brexit for the second time. But they are supposed to refuse to leave the EU without an agreement.
These expectations strengthen the pound after this week's volatile course. The pound sterling rose up to $ 1.3290 and as low as $ 1.2945. It exchanged 0.7% to 1.3150 USD. British equities and government bonds were stable
UBS analysts have said that even if lawmakers rejected Brexit without agreement, the end result was still unclear. He advised clients to "remain cautious and avoid pursuing short-term recoveries in sterling or increasing exposure to UK equities".
DIVING
The other epic that shook the global markets this week was Boeing's stock, as more and more countries landed its 737 MAX 8s after Sunday's crash in Ethiopia, the second deadly crash in the world. less than six months.
Boeing shares listed in Frankfurt have again lost 2 to 6 weeks. A 6% drop in New York on Tuesday brought the Dow down 0.4%.
However, benchmarks for the S & P 500 and Nasdaq closed higher after the publication of a low inflation report for the month of February, which reinforces expectations. The Federal Reserve will remain patient with rates and may appear more accommodating at next week's meeting.
These expectations had raised US 10-year yields to 2.596% on Tuesday to their lowest level in 10 weeks and pushed the dollar down for a fourth day in a row against a basket of currencies.
German 10-year bond yields also fell, coming close to zero percent.
The Australian and New Zealand dollars slid 0.3%, due to weak consumer confidence in Australia.
The euro remained stable against the dollar at around $ 1.129, up from its lowest level in 20 months ($ 1.1174) after the European Central Bank postponed its rate hike schedule and announced a cheap loan program for banks.
In commodity markets, the depreciation of the dollar allowed gold to reach its highest level in two weeks at nearly $ 1,307 an ounce.
Brent crude oil futures rose about 0.3% to $ 66.88 a barrel after a Saudi official said the kingdom was considering cutting back on oil exports and the US government had lowered its domestic production growth forecast.
Report by Sujata Rao, supplementary report by Dhara Ranasinghe in London and Wayne Cole in Sydney; edited by Larry King
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