October 18, 2019 / 3:58 PM / a month ago

GLOBAL MARKETS-Dollar weakens on Brexit, shares sapped by weaker China growth

(Adds U.S. market open, byline, dateline; previous LONDON)

* China data, investor caution before Brexit vote, hits markets

* China GDP grows 6.0% in third quarter, near three-decade low

* Dollar weakens ahead of Brexit vote on Saturday

* Benchmark government bond yields nudge higher

By Herbert Lash

NEW YORK, Oct 18 (Reuters) - The dollar headed for its worst week in almost four months on Friday, pummelled by sterling and euro rallies driven by a deal on Britain’s departure from the European Union, while China’s weakest growth in nearly three decades weighed on equities.

The dollar crept lower against the euro as the common currency enjoyed a lift from hopes a Brexit deal could improve the odds of the euro zone avoiding a recession.

Dismal manufacturing data and worries the U.S.-China trade war could slow euro zone economies even further has rattled the euro this year, while fears of a disorderly Brexit has slammed sterling.

“We can easily tell what’s driving the euro, and that’s a potential Brexit deal. We’re going to find out this weekend whether this is going to turn into a realty or whether it’s a pipe-dream,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

The euro rose 0.16% to an almost two-month high of $1.114. Sterling edged up 0.05% to a five-month high of $1.2895.

British Prime Minister Boris Johnson confounded his opponents on Thursday by clinching a new deal with the EU, even though the bloc had promised it would never reopen a treaty.

Parliament will vote Saturday on a deal that could lead shares in British-oriented businesses, such as housebuilders and retailers, to rocket to record highs if approved. Investors also predict the pound will rally around 5%.

“The driver today is clearly the vote coming up and whether Boris Johnson can pull the rabbit out of the hat and pull this off,” Mendelsohn said.

MSCI’s gauge of stocks across the globe shed 0.21% while the FTSEurofirst 300 index of leading European shares fell 0.35%.

Asian stocks stumbled after China’s third-quarter economic growth slowed more than expected to its weakest pace in almost three decades as the bruising U.S. trade war hit factory output. Gross domestic product (GDP) rose just 6.0% year-on-year.

Chinese shares fell 1.2%.

Wall Street edged lower, dragged down by Johnson & Johnson after it moved to recall a batch of baby powder, and as worries about the global economy following China’s GDP data offset a string of earnings beats.

Robust earnings from Coca-Cola Co, Schlumberger NV and American Express Co helped mitigate the losses.

The Dow Jones Industrial Average fell 83.71 points, or 0.31%, to 26,942.17. The S&P 500 lost 6.9 points, or 0.23%, to 2,991.05 and the Nasdaq Composite dropped 46.25 points, or 0.57%, to 8,110.60.

U.S. Treasury yields fell as investors awaited the Brexit vote on Saturday, with the benchmark 10-year U.S. Treasury note last up 5/32 in price to yield 1.7396%.

Oil prices steadied as concern over slower growth in China, the world’s biggest oil importer, was countered by bullish signals from the Chinese refining sector, as well as optimism surrounding the U.S.-China trade war.

Benchmark Brent crude oil futures fell 12 cents to $59.79 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 6 cents to $53.99 a barrel.

Reporting by Herbert Lash Editing by Chris Reese

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below