Global equity markets eased yesterday as investors awaited the first meeting later this week between US President Donald Trump and Chinese President Xi Jinping, as the dollar gained amid a positive US backdrop of rising interest rates.
European shares touched a 16-month high before paring gains as they tracked Asian shares higher in the wake of upbeat manufacturing data out of Europe and China.
Shares on Wall Street fell in morning trading as investors assessed how Mr Trump’s protectionist stance on trade will play out during meetings with Mr Xi slated for Thursday and Friday.
Mr Trump held out the possibility, in an interview published on Sunday by the Financial Times, of using trade as a lever to secure Chinese cooperation against North Korea.
“The market will be anxious and will be eager to glean whatever they get from those talks,” said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.
“The market was a little taken aback by Donald Trump’s comments recently about the meeting,” he said.
The pan-European FTSEurofirst 300 index lost 0.49 per cent, shedding earlier gains, and MSCI’s gauge of stocks across the globe shed 0.39 per cent.
German manufacturing growth hit almost a six-year high in March, Markit’s Purchasing Managers’ Index (PMI) showed.
Manufacturing activity in France and Italy also rose, adding to signs of a pickup in the global economy.
On Wall Street, the Dow Jones Industrial Average fell 79.12 points, or 0.38 per cent, to 20,584.1. The S&P 500 lost 11.29 points, or 0.48 per cent, to 2,351.43 and the Nasdaq Composite dropped 27.46 points, or 0.46 per cent, to 5,884.28.
The dollar rose amid investor expectations US rates will continue to rise this year, even as Federal Reserve officials have said the Fed is in no rush to tighten monetary policy.
US construction spending and manufacturing data were positive overall, affirming the economy’s steady improvement and helping lift the dollar. Construction spending grew 0.8 per cent to $1.19 trillion, the highest since April 2006.
The dollar index rose 0.31 per cent, with the euro unchanged at $1.0649.
The Japanese yen strengthened 0.34 per cent versus the greenback at 111.01 per dollar, while sterling was last trading at $1.247, down 0.60 per cent on the day.
Oil prices were under pressure as a rebound in Libyan oil output over the weekend offset upbeat economic data from Asia that suggested robust energy demand from the region.
Benchmark Brent futures eased by eight cents to $53.45 a barrel.
US West Texas Intermediate crude futures were down 10 cents at $50.50 a barrel.