European stocks dropped at the start of the last month of 2017 following a lackluster session in Asia. The dollar declined and Treasuries gained after tax reform efforts in the U.S. stumbled.
The Stoxx Europe 600 Index fell to a two-week low, with car makers leading the decline as all but one of the 19 industry sectors turned red. Earlier, Japanese shares trimmed an advance that briefly helped the Nikkei 225 Stock Average reclaim a 25-year high reached in November. Shares rose in Australia and declined in Hong Kong. Treasury yields dropped back below 2.4 percent after climbing eight basis points in the previous two days. The euro gained as manufacturing data underscored the region’s economic resilience.
The greenback was under pressure after the U.S. Senate suspended voting on the tax bill until Friday as it emerged a key compromise to win a majority had collapsed, leaving Republicans scrambling to salvage the legislation. Markets have become sensitive to any progress on the reforms, which may give fresh impetus to the equity bull run into the final weeks of the year.
Meanwhile, Washington politics has again been thrust into the spotlight amid a report that the White House is weighing replacing Secretary of State Rex Tillerson as his relationship with President Donald Trump sours.
Elsewhere, oil rose after posting its longest streak of monthly gains since early 2016 in the wake of an OPEC-led coalition’s long-awaited extension of crude supply cuts.
The Bloomberg Dollar Spot Index dipped 0.2 percent, the first retreat in a week.
The euro increased 0.2 percent to $1.1927, the strongest in a week.
The British pound declined 0.1 percent to $1.3512.
The Japanese yen advanced 0.1 percent to 112.42 per dollar. - Source: Bloomberg -