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GLOBAL MARKETS-West-Saudi tensions lift safe havens; stocks slip

Published 16/10/2018, 03:02 am
© Reuters.  GLOBAL MARKETS-West-Saudi tensions lift safe havens; stocks slip
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* Oil wobbles as West criticizes Saudi over missing journalist

* Europe stocks tick higher after touching 22-month low

* Safe havens shine: Yen, Swiss franc, gold rise (Updates after U.S. market open, changes dateline; previous LONDON)

By Rodrigo Campos

NEW YORK, Oct 15 (Reuters) - Major stock markets slipped on Monday as rising tensions between Western powers and Saudi Arabia added to concerns over economic growth, with investors flocking to traditional safe havens like the Japanese and Swiss currencies, as well as gold.

Oil prices were little changed as the Saudi-West rift more than offset concerns over slowing demand for oil in the long term.

The yen JPY= touched a one-month high versus the greenback and the Swiss franc CHF= rose for the fourth session in five FRX/ while gold XAU= hit its highest since late July. GOL/

Saudi Arabia's King Salman on Monday ordered an internal probe of the unexplained disappearance of Jamal Khashoggi as a joint Turkish-Saudi team was expected at the Saudi consulate in Istanbul, where the journalist and dissident was last seen on Oct. 2. police have audio showing Khashoggi was killed at the consulate, sources told Reuters. the weekend, prominent business people, including JPMorgan (NYSE:JPM) CEO Jamie Dimon and Ford Chairman Bill Ford canceled plans to attend an investor conference later this month in Saudi Arabia, the world's largest oil exporter. crude CLc1 fell 0.32 percent to $71.11 per barrel and Brent LCOc1 was last at $80.15, down 0.35 percent on the day.

"People had thought the Saudis would make up for the fall in Iran's output. If they are starting to use oil as their weapon, that will be a whole new chapter," said Kazuhiko Fuji, senior fellow at Research Institute of Economy, Trade and Industry, a think-tank affiliated with the Japanese government.

On Wall Street, major indexes were mixed after soft U.S. retail sales data. Apple AAPL.O was among the largest drags after a warning from Goldman Sachs (NYSE:GS) regarding overall consumer demand from China.

The Dow Jones Industrial Average .DJI fell 59.82 points, or 0.24 percent, to 25,280.17, the S&P 500 .SPX gained 0.97 points, or 0.04 percent, to 2,768.1 and the Nasdaq Composite .IXIC dropped 25.43 points, or 0.34 percent, to 7,471.47.

The pan-European FTSEurofirst 300 index .FTEU3 rose 0.27 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 1.10 percent.

Emerging market stocks rose 2.66 percent. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 2.35 percent higher.

Japan's Nikkei .N225 slumped 1.8 percent after Washington said it would seek a provision about currency manipulation in future trade deals with Japan. WEAKENS

The dollar softened against major currencies after the weak U.S. retail sales data for September while Treasury yields were little changed after last week hitting their highest level in over seven years.

The euro EUR= rose 0.26 percent to $1.1592.

The Japanese yen strengthened 0.37 percent versus the greenback at 111.81 per dollar, while Sterling GBP= was last trading at $1.3161, up 0.05 percent on the day.

The Swiss franc rose 0.4300 percent versus the greenback at 0.99 per dollar.

Turkey's lira TRYTOM=D4 jumped 1.5 percent to its strongest since mid-August after U.S. President Donald Trump cheered the release of a U.S. pastor who had been under house arrest in Turkey. Investors hope his release can lead to an improvement in strained U.S.-Turkey relations.

Saudi Arabia's riyal currency SAR= was still testing the boundaries of its peg at 3.7514 to the dollar - its weakest spot rate since June 2017.

Benchmark 10-year Treasury notes US10YT=RR last fell 5/32 in price to yield 3.1576 percent, from 3.141 percent late on Friday.

Last week, the 10-year yield reached 3.261 percent, which was last seen in May 2011, while the 30-year yield US30YT=RR hit a four-year peak at 3.446 percent.

"This (Treasury) market sell-off is far from over. The economy is still very strong," said Bryce Doty, senior portfolio manager at Sit Fixed Income Advisors LLC in Minneapolis.

Spot gold XAU= added 0.9 percent to $1,227.84 an ounce. U.S. gold futures GCc1 gained 1.17 percent to $1,232.30 an ounce.

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