GLOBAL MARKETS-Shares sapped by poor China growth, dollar gets weekly mauling

* European shares choppy in morning trading after Asia slips
* China GDP grows 6.0% in third quarter, near three-decade
low
* Dollar set for worst week since mid June, Wall Street
futures
flat
* Sterling gives back some gains after Brexit deal rally
* Benchmark government bond yields nudge higher
* World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Marc Jones
LONDON, Oct 18 (Reuters) - World stocks flatlined after
China posted its weakest growth in nearly three decades on
Friday, while the dollar headed for its worst week in almost
four months having been pummelled by pound and euro Brexit
rallies.
China's economy grew a slightly less-than-expected 6% in the
third quarter but traders seemed to be taking
comfort that swift stimulus from Beijing and major central banks
in recent weeks could avert a more serious downturn.
Asia did see a 1.2% slump in Chinese shares .CSI300 but
Wall Street futures were steady and European bourses had mostly
recovered from their early wobbles .SXAP after carmarker
Renault issued a screeching profit warning. .EU China's news didn't come as too much of a surprise either
amid the country's trade war with the United States and after
the International Monetary Fund had cut its global forecasts
again this week.
"You can't get away from the fact that China is slowing, but
it's not slowing more than we thought," said head of global
macro strategy at State Street Global Markets Michael Metcalfe.
"We know that Q4 is going to be a soft patch, but to a
degree policymakers are ahead of this, so as long as we don't
have an escalation of the trade war now, I think markets can
handle it."
In currencies, sterling was taking a breather at $1.2886
GBP= , having scored its best six-day streak in nearly 30 years
on Thursday after Britain and the EU sealed a new Brexit deal.
Doubts about whether that deal will be approved in the
British parliament were still sky high, though.
Swathes of lawmakers, who are either reluctant about Brexit
or worried the deal is not a clean enough break, will debate the
deal in a rare Saturday sitting, meaning Monday trading will
certainly be lively.
"Whatever was agreed last night with the EU still has to go
through the British parliament... the uncertainty surrounding
that still hasn't changed one iota," said James McGlew,
executive director of corporate stockbroking at Argonaut.
The euro meanwhile continued to creep upwards, making a
7-week high of $1.1145 EUR=EBS . The dollar remained weak too,
having seen poor retail sales data and more U.S. interest rate
cut talk contribute to its biggest weekly slide since June.
.DXY
Money markets are pricing in an 82% chance of a U.S.
interest rate cut at the Oct. 30 meeting, Refinitiv data shows.
"We are lowering the policy rate today, we are taking on
board downside risk, but we can take back that insurance in 2020
or 2021 if it turns out we were overly worried about the
downside risks," Federal Reserve policymaker James Bullard said
this week. Helping to alleviate immediate trade war worries, China had
said on Thursday that it hoped to reach a phased agreement in
its trade dispute with the United States as soon as possible.
Investors were also encouraged by upbeat premarket earnings
from Coca-Cola KO.N and Oilfield services provider
Schlumberger SLB.N , but poor results from International
Business Machines Corp IBM.N and weak U.S. economic data
weighed.
Housing starts, industrial production and mid-Atlantic
factory output all fell short of economists' expectations.
Reflecting the cautious mood, the safe-haven yen
strengthened, with the dollar falling 0.13% to 108.51. The yield
on benchmark 10-year Treasury notes US10YT=RR edged up though
to 1.764%, compared with a U.S. close of 1.755% on Thursday.
Brexit progress meant European yields were also nudging up
with German Bund yields holding at -0.40%, the highest since
early August. DE10YT=RR
The Bund yield is now up 16 bps since Irish and British
leaders said on Oct. 10 they saw a path to a Brexit deal, which
boosted risk appetite and weakened demand for safe-haven assets
like bonds.
In commodities, oil fell on the China data, with Brent crude
LCOc1 easing 0.52% to $59.60 and U.S. crude CLc1 dropping
0.19% to $53.83.
"The (China) GDP print has weighed on short-term sentiment
and we have seen regional stock markets and oil contracts edge
lower because of that," said Jeffrey Halley, senior market
analyst for Asia Pacific at brokerage OANDA.
Crude demand growth tends to track economic growth trends,
but Halley said China's need for oil would not recede any time
soon.
Underlining that view, Chinese official data released on
Friday showed robust refinery throughput in September, rising
9.4% from a year earlier to 56.49 million tonnes, on increases
from new refineries and some independent refiners resuming
operations after maintenance.
Gold XAU= dipped to $1,488 per ounce. GOL/

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GBP loses Brexit deal boost https://tmsnrt.rs/2MtqzNH
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(Additional Reporting by Shadia Nasralla in London and Andrew
Galbraith in Shanghai; Editing by Nick Macfie)