GLOBAL MARKETS-Stocks edge lower as investors eye Fed's Jackson Hole meeting

* MSCI world equity index down 0.25%
* Dollar slips as Jackson Hole meeting gets underway
* U.S. factory sector contracts for first time in a decade
-IHS
Markit

(Updates to U.S. market close, adds comment)
By Saqib Iqbal Ahmed
NEW YORK, Aug 22 (Reuters) - An index of stock markets
worldwide crept lower on Thursday on uncertainty over the
outlook for U.S. interest rate cuts and weak U.S. manufacturing
data that raised concerns about the health of the world's
largest economy.
U.S. manufacturing industries in July 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. "Manufacturing 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 Chair 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 central bank to reduce its benchmark rate.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 47 countries, was down 0.25%.
On Wall Street, stocks finished a choppy session nearly
unchanged. While strong results from retailers bolstered
confidence in consumer demand and lifted shares, the
manufacturing data and uncertainty about the interest rate
outlook kept investors in check. The Dow Jones Industrial Average .DJI was the strongest of
the three U.S. major stock indexes, helped by a 4.24% 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.
The Dow rose 49.51 points, or 0.19%, to finish at 26,252.24,
the S&P 500 .SPX lost 1.48 points, or 0.05%, to end at
2,922.95 and the Nasdaq Composite .IXIC dropped 28.82 points,
or 0.36%, to close at 7,991.39. "The market is pausing as investors are waiting for big news
tomorrow on Chairman Powell's speech," said James Ragan,
director of wealth management research at D.A. Davidson in
Seattle.
European 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 closed
down 0.40%.
In currency markets, the dollar slipped 0.1% against a
basket of other major currencies to 98.193 .DXY , but moved
within narrow ranges as investors awaited more clues from the
Fed.
While 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 it 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.
Kansas City Fed President Esther George and Philadelphia Fed
President Patrick Harker said on Thursday the U.S. central bank
currently does not need to deliver more stimulus to the economy
after it cut rates for the first time in more than a decade last
month. 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.
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U.S. Treasury yields climbed as comments from Fed officials
dampened hopes of future interest rate cuts.
Benchmark 10-year notes US10YT=RR were down 10/32 in price
to yield 1.6131%, up from 1.577% late on Wednesday.
Oil prices weakened as worries about the global economy
weighed. Brent crude LCOc1 settled down 38 cents, or 0.6%, at
$59.92 a barrel, while U.S. West Texas Intermediate crude CLc1
ended the session 33 cents, or 0.6% lower at $55.35.
Gold prices were slightly lower as investors awaited the
outcome of the Jackson Hole meeting. Spot gold XAU= dropped
0.23% to $1,498.5259 an ounce.

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Composite Euro area PMIs rise https://tmsnrt.rs/2Z9i5mz
Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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