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World stocks, dollar steady after U.S.-North Korea summit

Kitco News

NEW YORK (Reuters) - World stock markets were little changed on Tuesday while the U.S. dollar fell slightly against an index of major currencies, as investors brushed aside a long-awaited U.S.-North Korea summit aimed at denuclearizing the Korean peninsula.

U.S. President Donald Trump and North Korean leader Kim Jong Un met in Singapore, pledging to work toward complete denuclearization, while Washington committed to providing security guarantees for its old enemy.

The MSCI all-country world index .MIWD00000PUS, which tracks shares in 47 countries, gained 0.07 percent on the day.

The dollar index .DXY fell 0.04 percent, steadied in part by data on Tuesday showing U.S. consumer prices rose in May amid a slowdown in the increase of gasoline costs.

The euro EUR= was up 0.06 percent to $1.1789.

Investors had mixed reactions to the North Korea summit, which ended with the signing of a joint statement that gave few details on how the goals set by both sides would be achieved.

“Any de-escalation is good, because in the background you always have worries about these situations,” said Old Mutual Global Investors European fund manager Ian Ormiston.

Others felt the sit-down between Trump and Kim did little to change the game.

“Markets are skeptical,” said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts. “This is more of a case of ‘we’ll believe it when we see it’, rather than actually reacting.”

Buyers of equities and government bonds seemed more interested in other matters. Along with the positive U.S. inflation data, investors were focused on the kick-off of a two-day U.S. Federal Reserve meeting, at which the Fed is expected to raise interest rates, as well as meetings later this week by the European Central Bank and the Bank of Japan.

“”We’re eagerly awaiting the Fed, the ECB and the BOJ, in that order,” said Gregory Anderson, global head of FX strategy at BMO Capital Markets in New York. “People are reluctant to do a whole lot ahead of that.”

Futures contracts indicate a 96 percent probability the fed funds rate will be raised a quarter of a percentage point on Wednesday, according to CME Group.

Benchmark 10-year U.S. Treasury notes US10YT=RR last fell 3/32 in price to yield 2.9663 percent, from 2.957 percent late on Monday.

The 30-year bond US30YT=RR last fell 4/32 in price to yield 3.1032 percent, from 3.097 percent Monday.

Wall Street's main equity indexes were mixed but steady, with the Dow Jones Industrial Average .DJIfalling 8.78 points, or 0.03 percent, to 25,313.53, the S&P 500 .SPX gaining 3.07 points, or 0.11 percent, to 2,785.07 and the Nasdaq Composite .IXIC adding 28.74 points, or 0.38 percent, to 7,688.66.

Twitter (TWTR.N) drove the jump on the benchmark S&P, gaining 6.25 percent in midday trading after J.P. Morgan raised its price target by $11 to $50.

Tesla jumped more than 4.8 percent after Keybanc raised its estimates for Model 3 deliveries for the second quarter and full-year.

In Europe, the regional FTSEurofirst 300 index .FTEU3 lost 0.01 percent.

The European Central Bank meets on Thursday, with some expecting it to provide guidance for ending its bond-buying program at the end of this year.

The spread between Italian and German 10-year borrowing costs narrowed as the U.S.-North Korea summit drew to a close, following a rally on Monday after reassuring comments from Italy’s new economy minister.

Oil was mixed after falling earlier in the day. Volatility subsided to its lowest in three weeks, as investors prepared for a key meeting of the OPEC producer group next week.

U.S. crude CLcv1 rose 0.53 percent to $66.45 per barrel and Brent LCOcv1 was last at $76.41, down 0.07 percent.

In Asian equity markets, trading was volatile with Japan's Nikkei .N225 paring early gains to close 0.3 percent higher after earlier rising as much as 0.9 percent.

Additional reporting by Ritvik Carvalho, Kate Duguid and Karen Brettell; Editing by Bernadette Baum

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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