World stocks slip as trade relief fades, amid Italy concerns
A currency trader walks by the screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room in Seoul, South Korea, Tuesday, Oct. 2, 2018. Asian shares fell on Tuesday as relief that the United States had brokered a trade deal with Canada gave way to concerns that negotiations with China were at a standstill. (AP Photo/Lee Jin-man)
A currency trader talks near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room in Seoul, South Korea, Tuesday, Oct. 2, 2018. Asian shares fell on Tuesday as relief that the United States had brokered a trade deal with Canada gave way to concerns that negotiations with China were at a standstill. (AP Photo/Lee Jin-man)
Global markets slipped Tuesday as investors took stock of the standstill in U.S. trade negotiations with China, despite a fresh deal on North American trade. In Europe, concerns about Italy's public spending plans weighed on sentiment.
KEEPING SCORE: Germany's DAX lost 0.6 percent to 12,260 and the CAC 40 in France dropped 0.7 percent to 5,471. Italy's FTSE MIB was down 0.1 percent, extending a string of losses since last week. Britain's FTSE 100 fell 0.3 percent to 7,472. Wall Street was set to open slightly lower. Dow futures shed 0.2 percent and S&P 500 futures were down 0.1 percent.
ITALY'S SPENDING: Eurozone nations have criticized Italy's budget proposals, which they say would increase the country's debt and skirt the rules of good fiscal housekeeping shared by the 19 nations using the euro currency. Italy plans to raise its budget deficit to up to 2.4 percent of its gross domestic product, exceeding a 1.6 percent limit the government had set for 2018. The eurozone sets overall targets of 3 percent annual deficits and commits countries to move toward 60 percent of overall debt. Italy's debt currently stands at about 130 percent of its GDP. Concerns shook the country's financial markets on Tuesday. The FTSE MIB index has been largely falling since last week, though it trimmed its losses Tuesday.
U.S.-CANADA DEAL: Canada joined the revamped North American trade agreement with the U.S. and Mexico late Sunday after weeks of negotiations. On Monday, President Donald Trump hailed the agreement as a breakthrough for U.S. workers and vowed to sign it by late November. Trump branded the U.S.-Mexico-Canada Agreement as "USMCA." The new agreement faces a lengthy path to congressional approval.
ANALYST'S TAKE: "The revamped trade pact adds to KORUS, the bilateral trade agreement between the U.S. and Korea, to show that the Trump administration has capacity to strike trade deals," Zhu Huani of Mizuho Bank said in a commentary. "Nonetheless, a protracted trade war with China is still expected given both sides have little appetite for further negotiation at this juncture," she added.
ASIA'S DAY: Hong Kong's Hang Seng tumbled 2.4 percent to 27,126.38. Australia's S&P/ASX 200 lost 0.8 percent to 6,126.20, as the Reserve Bank of Australia maintained its economic outlook and kept its benchmark interest rate at a record-low 1.5 percent. South Korea's Kospi lost 1.3 percent to 2,309.57, while the benchmark Nikkei 225 in Tokyo added 0.1 percent to 24,270.62. Markets in the Chinese mainland were closed for a week-long holiday. Stocks fell in Taiwan and throughout Southeast Asia.
ENERGY: Benchmark U.S. crude added 15 cents to $75.45. The contract climbed 2.8 percent to $75.30 a barrel in New York on Monday, its highest price since November 2014. Brent crude, used to price international oils, dropped 23 cents to $84.75 per barrel in London.
CURRENCIES: The dollar weakened to 113.80 yen from 113.92 yen on Monday. The euro fell to $1.1542 from $1.1575. The Canadian dollar rose to $1.2812 from $1.2787.