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GLOBAL MARKETS-Oil, copper slip as U.S.-China trade row escalates

Published 2018-08-23, 12:06 p/m
© Reuters.  GLOBAL MARKETS-Oil, copper slip as U.S.-China trade row escalates
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* Fresh round of U.S.-China trade tariffs take effect

* Dollar snaps losing streak after Fed signals Sept rate hike

By Herbert Lash

NEW YORK, Aug 23 (Reuters) - Oil and copper prices slipped on Thursday as the U.S.-China trade dispute escalated while global equity markets traded slightly lower as gains in U.S. technology shares offset declines in commodity and trade-sensitive shares.

The United States and China implemented punitive 25 percent tariffs on $16 billion worth of each other's goods, even as mid-level officials from both sides resumed talks in Washington. dollar rose after minutes released on Wednesday from the Federal Reserve's most recent meeting suggest the U.S. central bank is on course for further interest rate hikes.

The minutes showed policy-makers discussed how global trade disputes could batter businesses and households. A prolonged trade war could change expectations for monetary tightening.

A drop in crude prices pushed oil heavyweights lower, with Exxon Mobil (NYSE:XOM) leading declining shares in U.S. markets and on MSCI's gauge of global equity markets .MIWD00000PUS , which shed 0.29 percent.

Oil prices were choppy as traders were tugged lower by the U.S.-Sino trade dispute with receiving some support from a report showing a decline in U.S. commercial crude inventories. LCOcv1 fell 25 cents to $74.53 while U.S. crude CLcv1 rebounded to slid 29 cents to $67.57 per barrel.

"Fears are rife that economic headwinds stemming from an escalation in their trade war will ultimately hurt global oil demand," said Stephen Brennock, analyst at brokerage PVM Oil Associates.

In London metals markets, benchmark copper CMCU3 fell 0.35 percent at $5,984 a tonne, paring losses of more than 1 percent during the session.

China accounts for nearly half of global copper consumption and prices are near their highest in two years as manufacturers have rushed to buy refined metal to avoid import tariffs.

In Europe, the pan-European FTSEurofirst 300 index .FTEU3 lost 0.14 percent while shares on Wall Street trended lower.

The Dow Jones Industrial Average .DJI fell 99.88 points, or 0.39 percent, to 25,633.72. The S&P 500 .SPX lost 6.26 points, or 0.22 percent, to 2,855.56 and the Nasdaq Composite .IXIC dropped 14.05 points, or 0.18 percent, to 7,875.05. trade-sensitive S&P industrials sector .SPLRCI dipped -0.44 percent, while the technology index .SPLRCT rose 0.22 percent, led by gains in Microsoft MSFT.O and Apple AAPL.O .

U.S. Treasuries were little changed ahead of a speech by Fed Chairman Jerome Powell on Friday at the annual economic symposium in Jackson Hole, Wyoming. on wait-and-see mode for Jackson Hole tomorrow," said Subadra Rajappa, head of U.S. rates strategy at Societe Generale (PA:SOGN) in New York.

Benchmark 10-year U.S. Treasury notes US10YT=RR rose 2/32 in price to yield 2.8189 percent.

Signs of faster economic growth and inflation in the euro zone lifted German 10-year bund yields DE10YT=TWEB to 0.35 percent, up from recent lows of 0.29 percent earlier this week. dollar snapped a five-day losing streak. dollar index .DXY rose 0.29 percent while the euro EUR= slid 0.19 percent to $1.1574. The Japanese yen JPY= weakened 0.51 percent versus the greenback at 111.15 per dollar.

The Australian dollar AUD=D3 fell 1.17 percent after several senior ministers tendered their resignations on Thursday and demanded that besieged Prime Minister Malcolm Turnbull call a second leadership vote. 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/

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