* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
* Global Assets in 2017 reut.rs/2ne9sjH
* EM stocks in 2017 tmsnrt.rs/2hn5N02
By Marc Jones
LONDON, March 31 World stocks dipped on Friday
as investors locked in some of the more than 6 percent gain that
has given them their best start to year since 2012, while the
dollar inched towards what could be its strongest week of 2017
Asian and European shares both saw profit-taking as traders
squared up for the quarter, though there was plenty still going,
not least in South Africa where the sacking of its respected
finance minister sent the rand tumbling
The dollar had its tail up after U.S. growth data,
talk of as many as three more Fed rate hikes this year and the
best Chinese manufacturing data in nearly 5 years, though even
that couldn't prevent commodity markets wilting.
Oil was back under $53 a barrel, metals were down 1 percent
and Europe's Basic Resources index, where big miners are
listed, fell 1.7 percent to leave London's FTSE and the
pan-European STOXX 600 index down 0.5-0.6 percent.
The later was still on track for a 5 percent rise and third
straight quarterly gain in a row, although emerging markets have
been the big winners. MSCI's EM stocks index is up 12.5 percent
on a dollar-adjusted basis. reut.rs/2ne9sjH
Against a basket of the world's other major currencies the
dollar was up 0.1 percent and tantalisingly close to a 1
percent weekly gain that would be its best in an otherwise
Over the quarter the greenback has fallen 1.7 percent, its
worst showing in a year, on doubts that U.S. President Donald
Trump was not prioritising - and did not have the necessary
power - to push through Congress the economic reforms that had
driven the dollar to 14-year highs at the start of the year.
"We are relatively optimistic on global growth but we think
the cyclical trade has rotated away from the Trump trade and
near-term U.S. fiscal stimulus," said Schroders' multi-asset
Portfolio Manager Angus Sippe.
"We are now more optimistic on the euro zone," he said,
adding he was also "marginally short the dollar."
The euro held its own at just under $1.07 as data
showed euro zone inflation had slowed in March by far more than
the economists had expected, driven down mostly by a
deceleration of energy price rises.
There were tentative signs too that the euro zone's weakest
members would be hit the hardest by an imminent scaling back of
the European Central Bank's asset purchase programme.
The yield, an indication of borrowing costs, on bonds of
southern euro zone states including Portugal and Italy headed
higher in the final day of trading before the ECB drops its
monthly purchases of debt from 80 billion to 60 billion euros.
Top ECB policymaker Benoit Coeure emphasised the bank would
tread carefully with any further changes.
GOOD AS GOLD
In Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan retreated 0.55 percent after its
12.5 percent charge over the quarter.
Hong Kong shares fell 0.6 percent, but were still
headed for a 9.8 percent quarterly jump and China's CSI 300
index added 0.4 percent, putting it on track for a 4.3
percent quarterly rise.
"Asia saw some pretty healthy profit-taking after a few
sessions of solid gains, and as investors await euro zone and
U.S. inflation data tonight," said James Woods, global
investment analyst at Rivkin Securities in Sydney.
Next week promises to an interesting start to the second
Trump and Chinese President Xi Jinping will meet in Florida
and the U.S. president has set the tone by tweeting that
Washington could no longer tolerate massive trade deficits and
He will also sign executive orders on Friday aimed at
identifying abuses that are causing the deficits and clamping
down on non-payment of anti-dumping and anti-subsidy duties on
imports, his top trade officials said.
Chinese Vice Foreign Minister Zheng Zeguang said on Friday
that it does not have a policy to devalue its currency to
promote exports, and neither does it seek a trade surplus with
the United States.
"The dialogue emanating from that is going to help set the
tone of the relationship between the U.S. and China and these
days it goes beyond trade. There is a lot to discuss
geopolitically, not least North Korea," said PIMCO portfolio
manager Yacov Arnopolin.
In commodities, Brent oil and U.S. crude dipped to $52.91 a
barrel and $50.35 a barrel, having zipped higher on Thursday
after Kuwait backed an extension of OPEC production cuts.
Oil was heading for a 6.8 percent loss for the quarter,
though. In contrast gold which was at $1,241.81 has
gained nearly 8 since the start of the year.
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Reporting by Marc Jones; editing by Mark Heinrich)