REFILE-GLOBAL MARKETS-Stocks slip as investors await Trump's Hong Kong response

(Fixes typo in headline)
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* U.S. stocks open lower
* MSCI All Country World Index down 0.64%
* Trump press conference on Hong Kong in focus

By John McCrank and Herbert Lash
NEW YORK, May 29 (Reuters) - Global stocks fell and safe
havens such as bonds and the Japanese yen rallied on Friday as
investors awaited Washington's response to China's national
security law on Hong Kong amid rising tensions between the
world's two biggest economies.
China's parliament on Thursday passed national security
legislation for the city, throwing its freedoms and its function
as a finance hub into doubt.
U.S. President Donald Trump said he would hold a news
conference on China later on Friday. Trepidation about a further
deterioration in Sino-U.S. relations, which have soured
considerably through the COVID-19 pandemic, put investors on
edge. U.S. stocks followed European and Asian shares lower. The
Dow Jones Industrial Average .DJI fell 180.15 points, or
0.71%, to 25,220.49, the S&P 500 .SPX lost 14.48 points, or
0.48%, to 3,015.25 and the Nasdaq Composite .IXIC dropped 4.66
points, or 0.05%, to 9,364.33.
In Europe, the pan-regional STOXX 600 index .STOXX lost
1.30% and MSCI's gauge of stocks across the globe
.MIWD00000PUS shed 0.59%.
Overnight in Asia, MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS fell 0.2%. Japan's Nikkei
.N225 retreated from a three-month high and the yen rose to a
two-week high of 107.06 against the dollar, while bonds rose.
If the United States no longer thinks Hong Kong is
sufficiently autonomous and no longer merits special treatment
under U.S. law, the reaction would be a small downdraft, as the
market should be expecting that, said Yousef Abbasi, global
market strategist at INTL FCStone Financial Inc in New York.
"But if you get further sanctions and something akin to
walking back the Phase 1 trade deal, the concern has to be
graver because now we have to worry about retaliation from
China," Abbasi said.
The Chinese yuan CNY= weakened in offshore trade. CNY/
Hong Kong's Hang Seng index .HSI declined 0.8% and has
lost about 3% in the two weeks since news of China's security
legislation broke. .HK
The yield on benchmark 10-year U.S. Treasury notes
US10YT=RR fell 4.6 basis points to 0.6624%.
U.S. Federal Reserve Chair Jerome Powell was scheduled to
speak at 1100 a.m. EDT/1500 GMT. The market's focus will be on
the central bank's long-term plans, including the likely restart
of large-scale bond-buying. MARCHES ON
Massive amounts of government stimulus offset reams of grim
economic data to prop up stocks in May. The S&P 500 .SPX is up
around 4% for the month and on track for its best May since
2009.
A rally in the risk-sensitive Aussie dollar AUD=D3 is
slowing, but the currency has gained nearly 2% for the month and
sits 20% above March lows.
MSCI's All Country World Index .MIWD00000PUS , which tracks
stocks across 49 countries, is on track for a 3.5% gain this
week - its best weekly performance since April.
Optimism has grown as countries have lifted lockdowns,
spurring hopes for a speedy economic recovery.
The number of Americans seeking jobless benefits fell for an
eighth straight week last week and New York has outlined plans
for re-opening. The euro EUR= was headed for its best month since December
as the European Union's 750 billion-euro coronavirus recovery
fund fueled optimism about the EU's political future. FRX/
It hit a two-month high of $1.1114 and last traded at $1.1119.
The dollar fell 0.366% =USD against a basket of
currencies.
Spot gold XAU= added 0.8% to $1,731.92 an ounce. GOL/
U.S. crude CLc1 recently fell 0.33% to $33.60 per barrel
and Brent LCOc1 was at $34.95, down 0.96% on the day. O/R
Both contracts are headed for their biggest monthly gains in
years as production cuts and optimism about demand recovery led
by China supported prices.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Recovery on course? https://tmsnrt.rs/2TQdG3s
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>