Key world equity markets fell yesterday as US President Donald Trump’s accusations that he was wiretapped by his predecessor dimmed US tax reform plans, while the dollar rose on improved chances an anti-EU candidate will become France’s president.
Mr Trump offered no evidence when he alleged, in a series of tweets on Saturday, that President Barack Obama had wiretapped him. That, combined with rising scrutiny of his campaign’s ties to Russia, put a damper on investor enthusiasm for stocks.
Alain Juppe, who served as French prime minister from 1995 to 1997, said he would not seek his country’s presidency in April elections, a development seen as likely boosting the candidacy of far-right party leader Marine Le Pen.
A poll last week showed that if Mr Juppe replaced the scandal-hit Francois Fillon as candidate, he would likely win the election’s first round of voting in a scenario that would likely have knocked the anti-European Union Ms Le Pen out of the race.
The news sent the euro 0.33 per cent lower to $1.0585 while the dollar rose in an index of six major world currencies by 0.1 per cent to 101.640.
Stocks on Wall Street fell, following a retreat in Euro shares that were weighed by a fall in Deutsche Bank shares. The German lender had unveiled an €8 billion cash call as part of a major reorganisation.
Deutsche Bank fell 7.89 per cent, making the stock the biggest drag to the FTSEurofirst 300 index. The pan-European gauge of leading regional shares closed down 0.54 per cent at a preliminary 1,473.03.
MSCI’s all-country index of worldwide stock performance fell 0.3 per cent as concerns about Mr Trump’s ability to see his economic agenda through weighed on stocks.
The Dow Jones Industrial Average fell 84.26 points, or 0.4 per cent, to 20,921.45. The S&P 500 lost 13.58 points, or 0.57 per cent, to 2,369.54 and Nasdaq Composite dropped 39.75 points, or 0.68 per cent.
Oil prices see-sawed after Iraq’s oil minister said the Organisation of the Petroleum Exporting Countries would likely need to extend its production cuts into the second half of 2017.
The market has been range-bound for more than 60 days, constrained by concerns that US production growth may counter Opec’s agreement to reduce output during the first half of the year.
Brent crude fell 10 cents to $55.80 a barrel while US crude fell 26 cents a barrel at $53.07.
US Treasury prices fell. The benchmark 10-year Treasury yield was down 2/32 to yield 2.4997 per cent.
In Europe, high-grade euro zone government bond yields edged lower on expectations the European Central Bank will maintain its ultra-loose monetary policy stance this week.