GLOBAL MARKETS-Trump's warnings to China weigh on stocks, sterling falls

* Sterling hits 28-mth low on heightened no-deal Brexit woes
* Stocks hurt by Trump's China warning
* Fed expected to cut rates on Wednesday

(Updates with open of U.S. markets, changes dateline; previous
LONDON)
By Chuck Mikolajczak
NEW YORK, July 30 (Reuters) - A gauge of global stock
markets edged lower after a warning from U.S. President Donald
Trump to China as bilateral trade talks began on Tuesday, while
concerns over a no-deal Brexit dragged on sterling for a fourth
day.
Trump warned China against waiting out his first term in
office before finalizing a trade deal, saying if he wins
re-election in the November 2020 presidential contest, the
outcome could be no agreement or a worse one. Investors have already been bracing for the Federal
Reserve's impending policy announcement on Wednesday, in which
the central bank is widely expected to cut U.S. rates by at
least a quarter of a percentage point, its first reduction since
the financial crisis.
"The real conundrum is if, in fact, the Fed cuts rates
because they are seeing a global economic slowdown and no real
inflation, then the administration becomes emboldened to fight
this battle longer," said Art Hogan, chief market strategist at
National Securities in New York.
"If not for trade policy, we would not be using monetary
policy in the way we are using it now."
On Wall Street, major stock averages declined, but were off
their initial lows.
The Dow Jones Industrial Average .DJI fell 26.83 points,
or 0.1%, to 27,194.52, the S&P 500 .SPX lost 7.96 points, or
0.26%, to 3,013.01 and the Nasdaq Composite .IXIC dropped
24.23 points, or 0.29%, to 8,269.10.
The broadside against China by Trump also weighed on
European indexes, along with soft forecasts from German giants
Bayer BAYGn.DE and Lufthansa LHAG.DE . The pan-European STOXX 600 index .STOXX lost 1.47% and
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.37%.
In currencies, sterling continued to stumble after suffering
its biggest decline of the year on Monday as no-deal Brexit
concerns mounted.
New Prime Minister Boris Johnson promised on Tuesday to lead
Britain out of the European Union on Oct. 31 "no matter what"
and followed that up by saying the next move in talks was up to
the European Union. Johnson added he did not want to leave the
bloc without a deal but had to prepare for that outcome just in
case. Sterling GBP=D3 fell as far as $1.2117, its lowest against
the dollar since March 2017 and was last trading at $1.2171,
down 0.38% on the day. The pound was on track for its fourth
straight daily decline. The dollar index .DXY , tracking the unit against six major
currencies, rose 0.05%, with the euro EUR= up 0.04% to
$1.1149. Treasury yields rose ahead of the Fed announcement,
after data showed consumer confidence rebounded in July to its
strongest level since November.
Benchmark 10-year notes US10YT=RR last fell 3/32 in price
to yield 2.0632%, from 2.055% late on Monday.
Among commodities, crude oil prices climbed for a fourth day
as the Fed rate cut anticipation boosted demand expectations.

U.S. crude CLcv1 rose 0.49% to $57.15 per barrel and Brent
LCOcv1 was last at $64.02, up 0.63% on the day.

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Sterling vs other world currencies in 2019 https://tmsnrt.rs/2ypmwtS
Global assets in 2019 http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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