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Global stock markets edged lower on Tuesday, as the previous session’s strong rally ran out of steam after U.S. President Donald Trump appeared to quash hopes of a trade truce with China at the upcoming G20 Summit.

Oil prices steadied, while the U.S. dollar, which has benefited from safe-haven flows this year as the trade conflict worsened, rose against peers.

On Monday, Trump said he expected to move ahead with raising tariffs on $200 billion in Chinese imports to 25 percent from the current 10 percent and repeated his threat to impose tariffs on all remaining imports from China.

The comments ran counter to recent speculation about a possible deal when Trump meets Chinese President Xi Jinping at the G20 summit in Buenos Aires this week.

“The market remains in a fragile state and because of that, anytime tariffs come into the picture you have worries,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Canada’s main stock index also fell on Tuesday, as Trump’s latest threat to raise tariff on Chinese imports hit mining shares.

At 11:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX Composite index was down 65.66 points, or 0.44 percent, at 14,946.99.

Nine of the index’s 11 major sectors were lower, led by a 1.8-per-cent slide in the materials sector.

Teck Resources Ltd. sat down 4.4 per cent, while Kinross Gold Corp fell 4 per cent. West Fraser Timber Co Ltd. and Canfor Corp. dropped 3.8 per cent and 3.5 per cent, respectively.

The financials sector slipped 0.3 per cent. Shares of Bank of Nova Scotia sat down slightly after reporting quarterly earnings below market estimates.

In New York, Apple Inc was down 0.5 per cent after Trump said tariffs could also be placed on laptops and iPhones imported from China.

The Dow Jones Industrial Average fell 61.54 points, or 0.3 per cent, to 24,578.50, the S&P 500 lost 1.67 points, or 0.06 per cent, to 2,671.83 and the Nasdaq Composite sat flat, dropped 0.36 points, or 0.0 per cent, to 7,081.86.

European markets opened subdued, but dipped as trading progressed. The pan-European STOXX 600 index lost 0.63 per cent and MSCI’s gauge of stocks across the globe shed 0.31 per cent.

Trade-related worries lifted the greenback and the dollar index, which tracks the U.S. dollar versus the euro, yen, sterling and three other currencies, was up 0.21 per cent at 97.281.

“Donald Trump’s renewed tariff threats against China have magnetized investors to the U.S. Dollar,” Lukman Otunuga, a research analyst at broker FXTM, said in a note.

The Federal Reserve should be even more attentive to new economic data as its gradual interest-rate hikes edge it ever closer to a neutral stance, Federal Reserve Vice Chair Richard Clarida said on Tuesday.

Investors will now turn their attention to a speech on Wednesday by Fed Chairman Jerome Powell and minutes from the central bank’s Nov. 7-8 meeting to be released on Thursday, for further clues of how many more times the Fed is likely to raise interest rates.

Sterling was weaker across the board after Trump said on Monday the agreement allowing the United Kingdom to leave the European Union may make trade between Washington and London more difficult.

Treasury yields fell less than a basis point amid renewed focus on trade tensions. The benchmark 10-year government yield was down a basis point from Monday’s close, last at 3.06 per cent.

In commodity markets, oil prices steadied, depressed by record Saudi production but supported by expectations that oil exporters would agree to cut output at an OPEC meeting next week.

Brent crude oil was up 42 cents a barrel at $60.9, not far above a 13-month low of $58.41 reached on Friday. U.S. light crude was up 33 cents at $51.96.

Oil prices are down by almost a third since early October, weighed down by an emerging supply overhang and widespread financial market weakness.

The stronger dollar weighed on gold, and spot gold slipped 0.56 percent to $1,215.45, a more than one-week low.


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