GLOBAL MARKETS-Asian stocks subdued, oil near 5-month low on U.S. inventory build

* Soft oil prices bolster expectations of Fed rate cuts
* Asian shares down slightly in early trade
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Hideyuki Sano
TOKYO, June 13 (Reuters) - Asian stocks stuttered on
Thursday, dogged by the uncertainty over an intractable
U.S.-China trade dispute, while oil prices flirted with
five-month lows thanks to higher U.S. crude inventories and a
bleaker demand outlook.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS ticked down 0.1%, slipping from a one-month high
touched earlier this week, while Japan's Nikkei .N225 lost
0.3%.
On Wall Street, the S&P 500 .SPX lost 0.20% on Wednesday.
A bigger mover overnight was oil, which tumbled 4% to their
lowest settlements in nearly five months, pressured by another
unexpected rise in U.S. crude stockpiles and by a dimming
outlook for global oil demand.
Brent crude futures LCOc1 barely moved at $60.01 in early
trade after a 3.7% slide on Wednesday to $59.97 a barrel, the
international benchmark's lowest close since Jan. 28.
U.S. West Texas Intermediate crude futures CLc1 firmed
slightly to $51.29 per barrel, compared to the previous day's
close of 50.72 a barrel, its weakest settlement since Jan. 14.
"It is a bit of mystery that oil prices are so low when
global stock prices remain relatively supported. But one thing
is certain. Weaker oil prices will curb inflation and boost rate
cut expectations," said Hirokazu Kabeya, chief global strategist
at Daiwa Securities.
Government data showed on Wednesday U.S. consumer prices
barely rose in May, with the core annual inflation
USCPFY=ECI slowing to 2.0%, compared to a peak of 2.4% last
July, adding to the growing expectations of a Federal Reserve
rate cut in coming months. Investors will be looking to what Fed policymakers will say
after its next policy meeting on June 18-19, with Fed Funds rate
futures 0#FF: pricing in a 25-basis-point rate cut for the
subsequent policy review on July 30-31.
The 10-year U.S. Treasuries yield dipped to 2.122 percent
US10YT=RR , a tad above Friday's 2.053 percent, its lowest
level since September 2017 while the two-year yield fell to
1.887 percent US2YT=RR .
Bond yields have plunged worldwide in the past several weeks
as investors bet the Fed, and possibly other major central
banks, will cut rates to cushion the potential economic damage
from the U.S.-China trade standoff.
Hopes that the leaders of the two countries will clinch a
deal on the sideline of Group of 20 summit meeting in Osaka on
June 28-29 have been fading as neither side has shown a
willingness to compromise.
Major currencies saw limited moves, and trader say few were
placing big bets ahead of key events later this month including
the Fed's policy review and the G20 meeting.
"It seems as though there is already clear consensus in
markets. The Fed will cut rates in July. The G20 will be closely
watched but few expect any major break-through there," said
Kyosuke Suzuki, director of forex at Societe Generale.
The euro slipped to $1.1293 EUR= , stepping back from
2-1/2-month highs of $1.1348 touched on Friday. The dollar was
little changed 108.47 yen JPY= .
The British pound is on the back foot after British
lawmakers defeated an attempt led by the opposition Labour Party
to try to block a no-deal Brexit by seizing control of the
parliamentary agenda from the government. Sterling fetched $1.2693 GBP=D4 , not far from this week's
low of $1.2653.

(Editing by Shri Navaratnam)