* U.S. futures down 0.5 pct after NYT report on Trump
* Trump reportedly asked Comey to end investigation
* Dollar index erases almost all post-election gains
* Oil falls 1 pct on U.S. inventory data
* European shares seen falling 0.2-0.6 pct
By Hideyuki Sano
TOKYO, May 17 U.S. share futures and the dollar
tumbled on Wednesday on worries about more U.S. political
turmoil after media reports said President Donald Trump asked
then-FBI Director James Comey to end a probe into Trump's former
national security advisor.
The reports raised questions over whether obstruction of
justice charges could be laid against Trump, weakening
confidence in the U.S. president's ability to push through an
aggressive stimulus programme that investors had been banking on
since his election in November.
S&P 500 mini futures, the world's most liquid stock
futures, dropped 0.5 percent to 2,385, though they have managed
to hold above their recent lows around 2,379.
European shares are expected to open lower, with
spread-betters looking at declines of 0.6 percent for Germany's
DAX, 0.4 percent in France's CAC and 0.2
percent for Britain's FTSE.
MSCI's broadest index of Asia-Pacific shares outside Japan
dropped 0.3 percent while Japan's Nikkei
shed 0.5 percent.
Mike O'Rourke, chief market strategist at Jones Trading,
wrote in a note that "Rising doubts about U.S. political
leadership should fuel further rotation into Europe. The
situation remains fluid, but this development should finally
break the financial markets out of the volatility vacuum."
Nobuhiko Kuramochi, chief strategist at Mizuho Securities,
said "worries about European politics and North Korea have
receded... But now we have worries about the Trump
Administration. Given that there are some stock indexes that
have risen more than 10 percent so far this year, we may be
entering a consolidation phase."
Trump asked Comey to end the FBI investigation into ties
between former White House national security advisor Michael
Flynn and Russia, according to a source who has seen a memo
written by Comey.
The news, first reported by the New York Times, came after
Trump had fired Comey and then discussed classified national
security information about Islamic State with Russian Foreign
Minister Sergei Lavrov.
The White House quickly denied the New York Times report,
saying in a statement it was "not a truthful or accurate
portrayal of the conversation between the president and Mr.
The tumult at the White House prompted currency traders to
ditch the dollar against a broad range of currencies, most
notably against the yen, to which investors often turn as a safe
haven when there are problems in Europe and the United States.
The dollar dropped 0.7 percent to 112.37 yen,
slipping further from its highs near 114.40 yen touched last
The dollar's index against a basket of six major currencies
dropped to 97.93, giving up all of the gains made
after Trump's election victory in November.
Other traditional safe-haven assets were also well bid. The
Swiss franc gained 0.3 percent against the dollar to 0.9828
franc per dollar. The gold rose 0.6 percent to $1,243.4
The euro hit a six-month high of $1.1117, as it also
drew support from solid economic data in the euro zone.
The euro zone's GDP grew 0.5 percent in January-March, in
line with expectations, and underscoring a recovery in the
On the other hand, U.S. economic data published on Tuesday
was mixed, raising more doubts about some rosy views on the
While U.S. manufacturing production recorded its biggest
increase in more than three years in April, housing starts
posted a surprise fall to five-month lows.
The data came after Friday's softer-than-expected retail
sales and inflation.
"Until Friday, markets had been focusing only on the bright
side of the U.S. economy. But that seems to have changed," said
Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.
The 10-year U.S. Treasuries yield dipped to
2.294 percent, flirting with its lowest level in two weeks.
Oil prices dropped after data showed an increase in U.S.
crude inventories, stoking concerns that markets remain
oversupplied despite efforts by top producers Saudi Arabia and
Russia to extend output cuts.
Brent crude futures were at $51.28 per barrel, down
36 cents, or 0.7 percent, from their last close.
(Reporting by Hideyuki Sano; Editing by Eric Meijer and Richard