* European shares slip, pound extends slide
* Chinese trade data raises more FX weakness concerns
* Asian FX hit by U.S. rate view; Thai baht in focus
* Risk aversion pushes Japanese yen higher
By Marc Jones
LONDON, Oct 13 World stocks stumbled to their
lowest level in a month on Thursday and the dollar and benchmark
bond yields slipped, after a sharp decline in Chinese exports
revived concerns about the health of the world's second-biggest
Riskier assets have had a difficult few weeks, undermined by
concerns about a potential rise in U.S. interest rates, the
outcome of U.S. elections, Britain's departure from the EU and
the health of German and Italian banks.
Asia's markets suffered falls overnight after data showed
Chinese imports in dollar terms were back in contractionary
territory, while exports dropped by a sharper-than-expected 10
Europe took a thumping too, with falls of 0.7-1.3 percent
for Britain's FTSE, Germany's DAX and France's
CAC pulling the region down for the sixth day
in the last seven ahead of what was expected to be a 0.5 percent
fall on Wall Street.
"We have got a stronger dollar and that is the market now
pricing in the likelihood of a December U.S Fed rate hike," said
Rabobank currency strategist Jane Foley.
"The other theme is the weakness of Chinese exports. That
does help turn the spotlight on the recent weakness of the yuan.
Then of course there is sterling."
Bets on a Federal Reserve move remained broadly unchanged
after minutes on Wednesday from the U.S. central bank's last
meeting had shown policymakers still grappling over timing, but
on balance inching closer to a hike.
The minutes said "it was noted that a reasonable argument
could be made either for an increase at this meeting or for
waiting for some additional information on the labor market and
That was just enough uncertainty to pull the dollar off a
2-1/2-month high versus the yen and push ten-year yields
on U.S. government debt down 5 basis points to 1.74
percent, a relatively large move out of U.S. hours.
There was no reprieve for Britain's pound though as it fell
to $1.2150 and to 90.5 pence per euro,
extending a slump of 15 percent or more since the UK's June vote
to leave the EU. (for graphic click tmsnrt.rs/2egbfVh)
The impact of the plunge was starting to show beyond the
market too, as the UK's largest supermarket Tesco
started taking some of the products from one of its biggest
suppliers, Unilever, off its shelves after refusing to
accept a 10 percent price hike.
The spat sent both firms' shares down over 2 percent and
Unilever's close to 3. "Clearly Unilever won't be the only
company wanting to pass on a 10 percent or similar price
increase due to the fall in the pound," Rabobank's Foley added.
With U.S. earnings season kicking off, Wynn Resorts
and Delta Airlines are scheduled to report later ahead of a host
of big name banks on Friday.
Germany's Deutsche Bank < DBKGn.DE> saw its battered shares
drop 2 percent in Europe after it was hit with its latest fine
and sources said it was implementing a hiring
The euro was choppy too, dropping under $1.10 for the
first time in almost three months at one point after Reuters
reported the ECB was considering a number of changes to its 1.5
trillion euro stimulus programme.
Sources at the central bank told Reuters the options
included occasionally buying bonds with yields lower than its
-0.4 deposit rate as well as being a bit more flexible on how
much of each countries' bonds it buys.
Back in China, the poor batch of trade numbers saw the
offshore version of the yuan fall to lows last reached in
a dramatic sell-off in January and the tightly controlled
'onshore' one hit a six-year low.
MSCI's broadest index of Asia-Pacific shares outside Japan
touched its lowest since Sept. 19 too as Hong
Kong stocks fell 1.2 percent and Japanese shares
dropped 0.4 percent thanks to a stronger yen.
"The China data has exacerbated the broad cautious mood and
we should see more gains for the yen and other safe-haven
assets," said a currency trader at an Asian bank in Hong Kong.
The Thai baht held close to an eight-month low as
Bangkok announced the death of 88-year-old King Bhumibol
Adulyadej, the world's longest reigning monarch.
Turkey's lira hit a record low after the government
signalled it was reviving plans for an executive presidency for
Oil prices steadied following a 1 percent drop overnight
after the Organization of Petroleum Exporting Countries reported
its output hit an eight-year high in September, offsetting
optimism over a pledge to restrict output.
Copper and other industrial metals were flushed
lower however by the China jitters, while safe-haven
gold edged up to $1,257 an ounce following a 6 percent
slump over the last three weeks.
For Reuters new 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
($1 = 0.8928 euros)
(Reporting by Marc Jones; editing by John Stonestreet)