Shares fall slightly while investors seek clarity on Fed stance

Stock markets were stable on Thursday, as uncertainty about the outlook for interest rate cuts in the United States following the publication of minutes from the last Federal Reserve meeting wich held tension among investors.

Jerome Powell, President of the Federal Reserve System

Jerome Powell, President of the Federal Reserve System. / Via REUTERS

Reuters | Tom Wilson

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Leer en español: Acciones bajan levemente mientras inversores buscan claridad sobre postura de la Fed

The collapse of the yuan to a minimum of 11 years also affected the appetite for risk, amid reports of operators that indicated that state banks were selling dollars to shore up the Chinese currency.

The MSCI global stock index, which oversees securities in 47 countries, was down 0.1%. In Europe, the STOXX 600 was down 0.1% in a volatile session, following the 0.5% decline experienced by the broad MSCI index of Asia-Pacific shares excluding Japan.

Wall Street index futures traded flat.

The minutes of the July meeting of the Fed showed profound differences between the authorities on whether rates had to be lowered last month, although there was some unity in the desire to indicate that they were not on a pre-established path to the relief of their policy.

That resistance to alleviate the policy seems to oppose the expectations of a cut of more than 100 basis points by the end of 2020 that have already discounted the markets.

Market players said the minutes reflected a dissonance between the expectations of cuts- fueled by geopolitical concerns such as trade tensions between the United States and China and the economic weakness of large economies such as Germany – and the apparently solid foundations of the US economy.

In fact, the intuitive strength of the world's largest economy was visible on Wednesday, when Wall Street benefited from unexpectedly strong results from retailers that advanced 20% to Target and 10% to Lowe's Cos.

However, beyond the United States, fears about the fragility of the global economy were evident in data known in Europe on Thursday.

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The German private sector continued to show its weakness in August, increasing the signs that the largest European economy is heading for a recession following the contraction suffered by its economy in April-June. Growth expectations for the eurozone also fell to a minimum in more than six years, although the expansion picked up somewhat this month.

Trade concerns affected foreign exchange markets, where the collapse of the yuan at 7.0752 units per dollar, its minimum since March 2008, boosted a flow towards assets considered safe as the yen. Against the dollar, the Japanese currency advanced 0.2%, to 106.41 yen, near the minimum of eight months of last week, of 105.05 yen.

In raw materials, Brent crude prices rose 48 cents, or 0.76%, to $ 60.78 per barrel at 1030 GMT, while the United States West Texas Intermediate earned 42 cents, or 0, 75%, at $ 56.06 a barrel.

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