* MSCI world equity index falls 0.3%
* Dollar slips as Jackson Hole meeting gets underway
* U.S. factory sector contracts for first time in a decade -IHS Markit
By Saqib Iqbal Ahmed
NEW YORK, Aug 22 (Reuters) - An index of global stock markets slipped on Thursday as investors worried about uncertainty over the outlook for U.S. interest rate cuts even as weak U.S. manufacturing data raised concerns about the health of the world's largest economy.
U.S. manufacturing industries recorded their first month of contraction in almost a decade amid concerns about whether the U.S.-China trade conflict would tip the economy into a recession, a private survey showed. has been pretty weak across the globe for a while now and we are starting to see that bleed into the U.S.," said Joe Mallen, chief investment officer at Helios Quantitative Research.
Investors' focus, however, remained firmly on Friday's speech by Federal Reserve Chairman Jerome Powell at a Jackson Hole, Wyoming, event, which could offer clarity on the direction of U.S. monetary policy.
The Fed has come under increasing pressure to cut borrowing costs more, including a call by President Donald Trump on Wednesday for the Fed to slash its benchmark rate.
The MSCI world equity index .MIWD00000PUS , which tracks shares in 47 countries, was down 0.31%.
On Wall Street, stocks opened higher as strong results from retailers bolstered confidence in consumer demand. But they retreated following the dismal U.S. manufacturing data and a comment from Philadelphia Federal Reserve Bank President Patrick Harker saying he does not see the case for additional stimulus. midday, however, the Dow reversed course, helped by a 3.9% jump in Boeing's BA.N shares after a Reuters report that the company has told suppliers it will resume production of its best-selling 737 jets at a rate of 52 aircraft per month in February 2020. Dow Jones Industrial Average .DJI rose 44.69 points, or 0.17%, to 26,247.42, the S&P 500 .SPX lost 4.64 points, or 0.16%, to 2,919.79 and the Nasdaq Composite .IXIC dropped 39.49 points, or 0.49%, to 7,980.72. 0.40European shares, which found support from upbeat surveys on Germany and the euro zone, declined on a report that the Bundesbank sees no need for German fiscal stimulus right now. The pan-European STOXX 600 index .STOXX lost 0.40%.
In currency markets, the U.S. dollar weakened as investors braced for a possible announcement or statement from the Jackson Hole meeting. the Fed's latest minutes showed U.S. policymakers are reluctant to begin a big rate-cutting cycle in the coming months, market participants still expect the Fed to signal a stimulus measure, or an affirmation that the U.S. central bank is on a steady path to ease interest rates, a scenario viewed as negative for the dollar.
"Jackson Hole is going to provide an opportunity for the Fed to correct that communication mistake in the minutes," said Edward Moya, senior market analyst at OANDA in New York.
The dollar slipped 0.11% against a basket of major currencies to 98.19. .DXY
Asian currencies suffered after the Chinese yuan fell to an 11-year low against the dollar, indicating trade tension between the world's two biggest economies remained a major issue. nB9N22601Z]
Treasury yields, which climbed after better-than-expected manufacturing data in Europe boosted risk sentiment, pared gains following dismal U.S. manufacturing data. 10-year notes US10T=RR were down 5/32 in price to yield 1.5927%, up from 1.577% late on Wednesday.
Oil prices weakened as worries about the global economy weighed. crude LCOc1 fell 0.49 cents to $59.81 a barrel, while U.S. West Texas Intermediate crude CLc1 fell 0.43 cents to $55.25.
Gold prices were little changed on the day as investors awaited the outcome of the Jackson Hole meeting. Composite Euro area PMIs rise
https://tmsnrt.rs/2Z9i5mz Graphic: World FX rates in 2019
http://tmsnrt.rs/2egbfVh