GLOBAL MARKETS-U.S.-China trade war keeps markets on their toes

* Sources say trade truce plan meets opposition
* European shares edge down at the open
* Wall Street futures retreat after Thursday's record
* Oil, metals ease on trade row report

By Julien Ponthus
LONDON, Nov 8 (Reuters) - Uncertainty about the fate of the
trade negotiations between the United States and China kept
markets on their toes on Friday, with European stocks benchmarks
mimicking their Asian peers and retreating from the previous
session's highs.
Overnight on Wall Street, the Dow and S&P 500 reached
record closing highs on hopes of a truce to end the damaging
tariff war but a Reuters report that the White House opposed
aspects of a tentative deal limited the day's gains.
The pan-European STOXX 600 opened down 0.4% at 405 points,
10 ticks from its April 2015 record of 415. S&P 500 futures
retreated 0.1% after the New York benchmark hit its highest
closing level ever on Thursday.
"The trade deal is the predominant driver", for markets at
the moment said Lars Kreckel, global equity strategist at Legal
& General Investment Management, noting that this morning dip in
market was a just knee-jerk reaction to the latest news on the
U.S.-China front.
The mood contrasts with Thursday's surge of optimism in
global markets on news Beijing and Washington had agreed to roll
back tariffs as part of a first phase of a trade deal.
Worries the pact could fall apart are now prompting some
investors to sell heading into the weekend.
Chris Jeffery, head of rates and inflation at the British
financial service group said the "background music" to the trade
row, a Federal reserve easing monetary policy and macroeconomic
indicators stabilising had helped the recent rally.
Germany's DAX GDAXi , a gauge of investors' sentiment on
trade, moved in synchronicity with the rest of the market and
eased 0.4%.
German exports posted their biggest rise in almost two years
in September, data showed on Friday, providing some relief amid
widespread concern that Europe's largest economy will dip into
recession in the third quarter.
"Market participants are getting increasingly 'long' on
good news", said Stephen Gallo, European head of FX strategy at
Canadian bank BMO.
"The 'payback' in risk assets for a very downbeat picture
earlier in the year looks unstoppable at the moment", he added.
In the meantime, crude oil futures fell amid lingering
uncertainty over the long-awaited deal and rising crude
inventories in the United States.
Brent crude LCOc1 , the global benchmark, was down 16
cents, or 0.3%, at $62.13 a barrel by 0259 GMT, after gaining
0.9% in the previous session.
U.S. West Texas Intermediate (WTI) crude CLc1 was down 56
cents, or 0.9%, at $61.73 a barrel. The contract rose 1.4% on
Thursday.
Safe haven gold, which tends to rise during times of
uncertainty, was a tad firmer, up 0.1% at $1,469.4 per ounce
XAU= , having hit a five-week low of $1.460.7 on Thursday.
Moves in the currency market were restrained.
The dollar was treading water at 109.32 yen JPY= , after
reaching a five-month high of 109.49 the previous day.
The euro was steady at $1.1050 EUR= as was the dollar
index =USD unchanged at 98.154 after hitting three-week highs
of 98.236 on Thursday.
A Reuters poll found that the dollar's persistent strength
would continue well into next year. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
EXCLUSIVE-Rollback of China tariffs faces fierce opposition in
White House-sources ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Julien Ponthus with Sujata Rao; editing by Philippa Fletcher)