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GLOBAL MARKETS-Protectionism worry drags on stocks, dollar hits 6-week low

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  1. Hot News
    • G20 drops vow to resist all forms of protectionism
    • Deutsche Bank weighs on European stocks
    • Dollar index touches roughly six-week low
    • Oil prices fall on concerns of growing U.S. output

    (Updates to close of European markets)

    The U.S. dollar slumped to a six-week low on Monday on worries over a dovish Federal Reserve, while U.S. and European stock markets dipped amid concerns about G20 financial leaders' decision to drop a pledge to keep global trade free and open.

    The dollar index .DXY , which measures the greenback against a basket of six major currencies, was last slightly higher at 100.42 after touching its lowest since Feb. 7 of 100.020. The index extended last week's weakness following recent interest-rate guidance from the U.S. Fed that was less hawkish than many had expected.

    Caution prevailed over U.S. and European stock markets after financial leaders of the world's biggest economies made only a token reference to trade on Saturday, acquiescing to an increasingly protectionist United States after a two-day G20 meeting failed to yield a compromise.

    Lower crude prices weighed on energy shares on both sides of the Atlantic, with European stocks closing modestly lower on the day. A 3.7-percent fall in Deutsche Bank DBKGn.DE shares hurt European banking stocks.

    Investors were awaiting Fed speakers this week, including Chair Janet Yellen on Thursday.

    Anxiety over the G20 decision further stalled the benchmark U.S. S&P 500 index's gains after two straight sessions of declines last week. Still, the index is up more than 11 percent since the election of U.S. President Donald Trump in November, spurred by optimism over his plans to reform the tax code and cut regulation.

    "With tax reform and infrastructure spending getting pushed to the end of this year or even next year, it will eventually weigh on sentiment and business confidence," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

    "Eventually, the market will lose patience," Frederick said. The tech-heavy U.S. Nasdaq Composite index briefly bucked the trend and hit a record intraday peak of 5,915.120 before edging lower.

    MSCI's all-country world equity index was last down 0.47 points, or 0.1 percent, at 450.79. .MIWD00000PUS .

    The Dow Jones Industrial Average .DJI was last down 12.1 points, or 0.06 percent, to 20,902.52. The S&P 500 .SPX was down 5.96 points, or 0.25 percent, at 2,372.29. The Nasdaq Composite .IXIC was down 6.77 points, or 0.11 percent, at 5,894.22.

    Europe's broad FTSEurofirst 300 index .FTEU3 ended 0.23 percent lower at 1,488.36.

    The dollar's earlier drop to a multi-week low against major rivals made dollar-priced gold cheaper for non-U.S. investors, thereby helping spot gold prices XAU= hit a two-week peak of $1,235.50 an ounce.

    "It's follow-through and a hangover from last week - the concept of a dovish Fed," said Brad Bechtel, managing director at Jefferies in New York in reference to the dollar's earlier weakness.

    Oil prices fell as investors continue to grapple with worries about growing U.S. oil output and high inventories.

    Brent crude LCOc1 was last down 6 cents, or 0.12 percent, at $51.7 a barrel. U.S. crude CLc1 was down 47 cents, or 0.96 percent, at $48.31 per barrel.

    The cautious mood boosted safe-haven Treasuries prices, helping push yields on safe-haven 10-year U.S. Treasury notes US10YT=RR to a two-week low of 2.472 percent.

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    World FX rates in 2017     http://tmsnrt.rs/2egbfVh  
    

    Global assets in 2017 http://reut.rs/1WAiOSC Global currencies vs. dollar http://tmsnrt.rs/2egbfVh Global bonds dashboard http://tmsnrt.rs/2fPTds0 Global market cap http://reut.rs/2mcp7T1

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