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GLOBAL-MARKETS-New U.S. tariff threat on Chinese goods hits stocks, dollar

Published 18/09/2018, 07:05 am
GLOBAL-MARKETS-New U.S. tariff threat on Chinese goods hits stocks, dollar
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(Refiles to fix headline tag)

* U.S. likely to announce tariffs on $200 bln in Chinese goods

* Wall St dragged by Apple (NASDAQ:AAPL), Amazon, fears of fresh tariffs

* Dollar broadly weaker as trade concerns weigh

* Oil trades edges lower on supply, demand concerns

By Herbert Lash

NEW YORK, Sept 17 (Reuters) - A gauge of global equity markets eased and the dollar slipped on Monday as an expected new round of tariffs from Washington on Chinese goods made investors skittish about an escalation of a U.S.-Sino dispute over trade.

U.S. President Donald Trump said he would announce his latest plan on Chinese commerce after markets closed. He was expected to level tariffs on about $200 billion of Chinese imports, and China has said it would retaliate. weaker dollar lifted gold prices and the price of most industrial metals slipped as the tit-for-tat dispute has fueled concerns that demand for metals will weaken.

The tech-heavy Nasdaq composite index fell 1.4 percent, or almost triple the decline of the broad market S&P 500 index.

Apple and Amazon.com (NASDAQ:AMZN) bore the brunt of investor worries about the tariffs, which were on a list unveiled in July that included $200 billion worth of internet technology products, other electronics, printed circuit boards and consumer goods. are slowly starting to realize that these new tariffs could be extremely disruptive to the supply chain," said Art Hogan, chief market strategist at B. Riley FBR in New York.

The trade tiff has yet to be felt in U.S. markets as the tariffs, which now are set at 3.8 percent, may rise to just 10 percent, which most companies can handle in a growing economy, said Brian Nick, chief investment strategist at Nuveen.

MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.37 percent while the pan-European FTSEurofirst 300 index .FTEU3 of leading regional shares closed up 0.07 percent. Wall Street, the Dow Jones Industrial Average .DJI fell 92.55 points, or 0.35 percent, to 26,062.12. The S&P 500 .SPX lost 16.18 points, or 0.56 percent, to 2,888.8 and the Nasdaq Composite .IXIC dropped 114.25 points, or 1.43 percent, to 7,895.79. dollar's weakening is a good sign for global markets, especially in emerging markets where the strong dollar has been a cause for concern, Nuveen's Nick said.

The greenback has benefited from safe-haven flows as the U.S.-Chinese trade conflict worsened.

The euro and sterling also advanced against the dollar on optimism that Britain would reach a deal with the European Union on the terms of its departure from the bloc. between the EU and Britain on Brexit are being conducted in a spirit of "good cooperation", said Michel Barnier, the EU's chief negotiator on the issue. dollar index .DXY fell 0.46 percent and the euro EUR= rose 0.48 percent to $1.1684. The Japanese yen JPY= strengthened 0.24 percent versus the greenback at 111.78 per dollar. Treasury yields rose across the board on growing expectations the Federal Reserve would raise interest rates in September and December, and perhaps at least twice more in 2019.

Yields on the 10-year U.S. Treasury note touched 3.022 percent, the highest level since late May. U.S. 30-year yields also hit a four-month peak of 3.159 percent, while 2-year yields soared to 2.799 percent, the strongest level in 10 years.

The benchmark U.S. 10-year note US10YT=RR last fell 1/32 in price to yield 2.9977 percent. on 10-year German bunds rose to 0.472 percent, but pared losses to trade at 0.458 percent. prices edged lower on concerns over how the U.S.-Sino trade dispute may dent global crude demand, but losses were limited as the market weighed potential supply tightening due to Iran sanctions. crude LCOc1 futures fell 4 cents to settle at $78.05 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 8 cents to $68.91 a barrel.

U.S. gold futures GCv1 for December delivery settled up $4.70 at $1,205.80 per ounce.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC-Global assets in 2018

http://tmsnrt.rs/2jvdmXl GRAPHIC-Emerging markets in 2018

http://tmsnrt.rs/2ihRugV GRAPHIC-World FX rates in 2018

http://tmsnrt.rs/2egbfVh GRAPHIC-MSCI All Country World Index Market Cap

http://tmsnrt.rs/2EmTD6j INTERACTIVE GRAPHIC: The long U.S. bull run in context

http://graphics.thomsonreuters.com/testfiles/bull-run/ GRAPHIC-Euro zone periphery govt bond yields

http://tmsnrt.rs/2ii2Bqr GRAPHIC-Earnings growth in U.S. and Europe:

https://reut.rs/2LkECRE

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