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GLOBAL MARKETS-Dollar flat, stocks mixed as Trump's Iran, trade talk offsets data

Published 2017-02-02, 03:01 p/m
© Reuters.  GLOBAL MARKETS-Dollar flat, stocks mixed as Trump's Iran, trade talk offsets data
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* Dollar rebounds after hitting mid-November low

* U.S. stocks dip after Trump trade comments

* BOE keeps rates unchanged; sterling drops

* European shares drop as Deutsche Bank disappoints (Updates to European market close)

By Dion Rabouin

NEW YORK, Feb 2 (Reuters) - The dollar was flat on Thursday after hitting its lowest level since mid-November, while world equity markets were mixed as investor concerns about the Trump administration's aggressive language toward Iran offset strong data on the world economy.

U.S. stocks fell after President Donald Trump's latest remarks on trade. In a meeting with lawmakers, Trump said he would like to speed up talks to either renegotiate or replace the North American Free Trade Agreement. also told reporters separately that "nothing is off the table" in dealing with Iran after its recent ballistic missile test. His comments came a day after his national security adviser put Tehran "on notice" over the test. also focused on solid economic readings from around the globe on manufacturing and inflation that suggest an improvement in 2017 as they positioned ahead of Friday's U.S. nonfarm payrolls report. NFP report is very, very important," said Douglas Cote, chief market strategist at Voya Investment Management. "The ADP report yesterday was very strong, corporate earnings were very strong, so we are in a positive fundamental backdrop for the economy, for corporations, for employment."

The Dow Jones Industrial Average .DJI fell 41.12 points, or 0.21 percent, to 19,849.82, the S&P 500 .SPX shed 3.62 points, or 0.16 percent, to 2,275.93 and the Nasdaq Composite .IXIC dropped 14.71 points, or 0.26 percent, to 5,627.93.

On Wednesday, the Federal Reserve left interest rates unchanged after its latest policy meeting even as it painted an upbeat picture of the economy. U.S. central bank, which has signaled three rate hikes for 2017, did not indicate when it might raise rates again, as it waits to see the impact of Trump's economic and trade policies.

"The Fed is concerned that the unraveling of trade deals could be very negative to the economy," said Peter Cardillo, chief market economist at First Standard Financial in New York.

"You could have improving earnings and good news on the economy, but that is getting overshadowed by the 'worry trade' with investors taking on a wait-and-see attitude."

POUND FALLS

The dollar index .DXY , which tracks the U.S. unit against six world currencies, fell to 99.233, its lowest level since Nov. 14. But it recovered and was last trading little changed from its levels late on Wednesday.

Benchmark 10-year Treasury notes were similarly flat in price to yield 2.47 percent.

Britain's pound fell against the dollar and euro after the Bank of England, while raising its forecast for British economic growth this year, kept monetary policy unchanged and said rates could go either way depending on the economic outlook. Governor Mark Carney said the revised growth forecast did not mean Britain's vote to leave the European Union would be without consequences.

European stocks were left flat-footed as disappointing company results, including a $7.5 billion fine for Deutsche Bank DBKGn.DE , sent its shares down more than 5 percent stock indexes .FTEU3 .STOXX fell 0.3 percent while London's FTSE 100 .FTSE rose half a percent.

Earlier, Asian shares ex-Japan .MIAPJ0000PUS hit their highest point since mid-October as Korea's markets .KS11 climbed to their best level since July 2015.

A gauge of major global bourses .MIWD00000PUS was little changed.

Oil prices slipped, with Brent crude futures LCOc1 down 14 cents to $56.72 a barrel after nearing a year-to-date peak.

Copper fell 0.75 percent to $5,901 a tonne CMCU3 . Safe-haven gold, however, hit its highest level since mid-November as the dollar weakened. Gold last traded up 0.65 percent at $1,217 an ounce XAU= .

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic: World FX rates in 2017

http://tmsnrt.rs/2egbfVh Global assets in 2017

http://reut.rs/1WAiOSC Global bonds dashboard

http://tmsnrt.rs/2fPTds0 Global bonds dashboard

http://tmsnrt.rs/2fPTds0 Emerging markets in 2017

http://tmsnrt.rs/2ihRugV

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