GLOBAL MARKETS-Stocks slip as markets await U.S. stimulus

* European shares down 0.3% in volatile trading
* Siemens gains 4.4%
* Dollar falls to two-year low
* Pound at 5-month high after BoE keeps rates steady
* Investors on tenterhooks for U.S. stimulus news
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Tom Wilson
LONDON, Aug 6 (Reuters) - Stocks slipped on Thursday as
investors waited for signs of agreement on a U.S. stimulus
package, while the U.S. dollar slumped to a two-year low on
fears that the recovery in the world's biggest economy was
lagging others.
European stocks edged down in volatile trading, with
Frankfurt .GDAXI gaining 0.2% as investors digested a fresh
batch of corporate earnings reports.
The broad Euro STOXX 600 .STOXX fell 0.2% after opening in
the black. London's .FTSE lost 1.3% as the pound jumped to a
5-month high after the Bank of England kept interest rates
steady and signalled that a move to sub-zero territory was not
imminent.
Siemens SIEGn.DE jumped 2.9% as its CEO said it was seeing
an improvement in its business in China, even if the United
States was less clear. nZ8N2CW014 .
S&P 500 futures ESc1 pointed to gains of 0.2%.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, slipped narrowly into the red, with
prospects of a fourth straight day of gains in doubt.
The mood in Europe reflected that in Asia, where stocks
outside Japan < .MIAPJ0000PUS> rose to a six-and-a-half month
peak before giving up some of those gains.
Markets are waiting direction on the shape of a U.S. fiscal
recovery package, currently subject to political wrangling in
Washington, said Hugh Gimber, global markets strategist at J.P.
Morgan Asset Management.
"Stocks are really struggling to find direction until we
know the outcome of those negotiations," he said. "The clock is
ticking for U.S. policymakers to get something done."
Top congressional Democrats and White House officials
appeared to harden their stances on the relief plan on
Wednesday, with few hints of compromise or that an unemployment
benefit as generous as $600 a week could be reinstated.
Fears that economic recoveries across major economies are
diverging have been playing out in currency markets, with the
dollar's two-year supremacy at risk.
With figures on jobless claims in the U.S. labour market
looming at 1230 GMT, the dollar =USD fell to a two-year low as
investors weighed whether the U.S. economic recovery from the
coronavirus hit was lagging other major economies.
The euro EUR= climbed to its highest against the greenback
since May 2018 before giving up its gains. It was last flat at
$1.18645.
That weak dollar, strong euro trend is set to continue into
next year, a Reuters poll showed, on expectations the U.S.
economic recovery is flagging, especially compared to Europe.
STEADY
The British pound GBP=D3 jumped to a fresh 5-month high
against the dollar after the Bank of England kept interest rates
steady at 0.1%, as it warned on possible risks from taking
interest rates in to negative territory.
The BOE offered less grim predictions on unemployment and
GDP contraction. Still, it said the British economy would not
recover to its end-2019 size until the end of next year. In May
it had said that milestone would be reached during the second
half of 2021. Sterling was last up 0.3% at $1.3159.
"More important for pound performance in the near-term were
the BoE's comments on the likelihood of further policy easing
later this year," analysts at MUFG wrote. "The comments did not
send a strong signal that the BoE is moving closer to adopting
negative rates.
For Reuters Live Markets blog on European and UK stock
markets, please click on: LIVE/

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