European stocks scored consecutive daily gains for the first time in three weeks yesterday, drawing support from a weak euro, but US and Canadian stocks drifted down as lower metal and oil prices weighed on the materials sector.

Emerging market stocks retreated one per cent, led by political risk-driven losses in South Africa and Turkey, while broader sentiment was dented by a revival of US rate rise expectations.

Markets are largely waiting for clues about the timing of the next US interest rate in a speech from Federal Reserve chair Janet Yellen tomorrow at a meeting of global central bankers in Jackson Hole, Wyoming.

Futures markets assign a roughly one-in-five chance it will be in September, and 50-50 odds by the end of the year.

On a light day for data, investors’ nerves may have been soothed by signs that the anticipated economic seizure in Britain – and beyond – from the shock vote in June to leave the European Union had not materialised.

“Brexit? What Brexit?” asked Holger Schmieding, chief economist at Berenberg Bank. “In the rest of the EU, the repercussions of the Brexit vote have been rather mild.”

The FTSEuroFirst index of the leading 300 European shares  closed up 0.3 per cent, having earlier fallen as much as 0.4 per cent, and Germany’s DAX  staged a similar rebound to trade up 0.5 per cent before paring some gains.Britain’s FTSE 100  ended 0.48 per cent lower, underperforming European peers, hurt by weakness in mining giant Glencore.

Sterling rose to a three-week high as speculators further cut bets against the currency after data indicated the economy was holding up after the Brexit vote.

The euro fell to a fresh one-week low against the US dollar, last down 0.4 per cent to $1.1257.

Materials were the biggest loser on the S&P 500 index, with the sector dropping 0.6 per cent . The Dow Jones industrial average fell 41.02 points, or 0.22 per cent, to 18,506.28, the S&P 500  lost 4.56 points, or 0.21 per cent, to 2,182.34 and the Nasdaq Composite dropped 9.16 points, or 0.17 per cent, to 5,250.92.

Oil extended losses, with US West Texas Intermediate crude falling 3.2 per cent to $46.56 per barrel, after an unexpected large build up in US crude stockpiles renewed worries about oversupply. Brent crude prices were down 2.22 per cent at $48.85. Slumping oil prices drove Canadian stocks lower. The Toronto Stock Exchange’s S&P/TSX composite index  was down 0.41 per cent.

US Treasury yields rose slightly after data showing existing home sales fell in July after four straight months of gains. The 10-year yield was last at 1.549 per cent. The long-dated yield curve had flattened to the lowest in 18 months on Tuesday. A flattening curve is often seen as a harbinger of low growth, inflation and rates.

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