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By Marc Jones
LONDON (Reuters) – Global equities struggled on Monday amid conflicting signals of a possible truce in China and the United States. trade dispute, while new concerns of the Federal Reserve on the global economy have undermined the dollar.
Asia took a long time to warm up but ended in strength and Europe was heading for its first rise in four sessions, with gains in the mining, technology and banking sectors helping to offset bad news in the auto sector.
It was a bit down-to-earth though. Renault shares fell by more than 10% while its co-chairman, Carlos Ghosn, was arrested in Japan for financial misconduct.
The sluggishness of the sector was further aggravated by a 10% drop in VW's overall figures for the month of October. Wall Street futures have collapsed on both sides in New York. The feeling began to deflate again. [.N]
"I'm not sure that a man deserves such a drop in the stock price," said Michael Hewson, CMC's market strategist, who spoke about the problems of Nissan and Renault.
"But people may think that this could prompt the French government – which has interests in Renault – to open an investigation into the operation of the company."
On the foreign exchange markets, the pound suffered a respite from the trauma of last week's Brexit, as the dollar and the euro dwindled, while the attention was back to the US trade quarrel. -chinoise.
Wall Street tightened on Friday after US President Donald Trump said he was unlikely to impose more tariffs on Chinese goods after Beijing sent a list of measures it was willing to take to resolve trade tensions.
The comment fueled speculation about an agreement when Trump will meet Chinese President Xi Jinping on the sidelines of the G20 summit in Argentina this month.
However, the US Chinese Tensions were clearly visible at an APEC meeting in Papua New Guinea this weekend, during which the leaders did not succeed to agree on a press release for the first time.
US Vice President Mike Pence said in a direct speech that US tariffs on Chinese goods would not cost more than $ 250 billion until China changed its habits.
"Trump's comments were seen as a glimmer of hope that new tariff measures could be put on hold," said Ray Attrill, head of NAB's foreign exchange strategy.
"The exchange of beards between Pence and Chinese President Xi Jinping in PNG this weekend continues to indicate that this is unlikely."
DETECT A FED SHIFT
The outlook for US interest rates was also uncertain.
Federal Reserve policymakers are still announcing upcoming rate hikes, but they also seem more worried about a possible global slowdown, suggesting that the tightening cycle would not be much longer.
Investment bank Goldman Sachs announced on Monday that it expected the pace of US economic growth to slow to near the world average next year and that the dollar would suffer a generalized fall.
In addition, it revised its long-term bearish outlook on the Japanese yen and toppled Latin American currencies, the Swedish krona, the Canadian, Australian and New Zealand dollars and the Israeli shekel up, the year next.
"We are seeing several changes in the global economic environment that, combined with a few negative medium-term factors, point to further declines than the broadening of the broad dollar in 2019," Goldman analysts said in a macroeconomic outlook report. .
This will draw attention to an appearance of Fed Chairman in New York, John Williams, later on Monday, to see if he takes up the same theme.
Investors have already increased the likelihood of further increases, with December's move up to 73%, down more than 90%. Futures contracts imply rates of around 2.74% by the end of next year, compared with 2.93% at the beginning of the month. <0#FF:>
US 10-year paper yields dropped sharply to 3.08% from a recent high of 3.25%.
The dollar followed to settle at 96.356 against a basket of currencies, down from the peak of 97.693. The euro was parked at 1.1424 dollar, while the dollar retreated to 112.72 yen.
BREXIT DRAMA
The pound sterling rose slightly to $ 1.2854 after the political turmoil caused by Brexit, which resulted in heavy losses. [GBP/]
British Prime Minister Theresa May said on Sunday that her reversal could delay Brexit as she could face a leadership challenge in her own party.
With pro-EU and pro-Brexit lawmakers dissatisfied with the draft agreement, it is not clear that it will be able to gain parliamentary support, increasing the risk that Britain will leave the EU without a deal.
Westminster "seems to be playing a very risky risk game, where the result could be an accidental" no-deal ", said the head of the UK's main business lobby, the CBI. "Surely, surely, we can do better than that."
In the commodities markets, gold was supported by the falling dollar and held at $ 1,220.
Oil prices suffered their sixth consecutive week of losses, but were corroborated by forecasts that the Organization of Petroleum Exporting Countries would reduce their production.
Brent rose 54 cents to 67.30 dollars a barrel, while US crude rose 70 cents to 57.16 dollars.
(Marc Jones report, edited by Kevin Liffey and Peter Graff)
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