S&P, Dow set for worst day in eight months on Trump turmoil

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The euro was up 0.2 percent against the dollar at $1.11, the first time it's breached that level since November, when Trump surprisingly won the US election. US gold futures gained 0.57 percent to $1,237.00 an ounce. Though the White House has denied the allegation, there's mounting unease in markets over the developments in the USA government.

The U.S. stock market early Wednesday was on pace to log its worst daily decline in months, as concerns about President Donald Trump's Federal Bureau of Investigation controversy weighed on investor sentiment.

Seven of the index's top 10 sectors fell more than 1 per cent.

The dollar index, which tracks the US currency against six peers and had scaled a 14-year peak of 103.82 .DXY on January 3, fell 0.6 percent to its lowest level since November 9, surrendering all of its "Trump bump" gains.

The greenback also came under pressure after weak USA housing data on Tuesday added to a recent run of disappointing economic reports and underlined uncertainty over the monetary policy outlook.

Asian equities retreated overnight, S&P 500 Index futures slipped and haven assets from gold to the yen advanced as the unrelenting pace of developments threatened to derail Trump administration policy prescriptions cheered by Wall Street. "It's registering with more investors that its going to be hard to get back on track with the latest allegations", Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. The S&P 500 financial sector tumbled more than 2 percent, led by losses in Bank of America and JPMorgan.

Analysts said the controversy around Trump has raised fears that he might not last a whole term and that, even if he did, there were too many distractions for him to be able to successfully push through his economic stimulus programme.

Oil prices were little changed as traders awaited weekly US inventory data and after Kuwait joined top producers Saudi Arabia and Russian Federation in support of prolonging supply cuts through March 2018 to reduce a global crude glut. The UK's FTSE index was trading lower by 0.04 percent, while French CAC 40 Index fell 0.44 percent. The MSCI All-Country World Index fell 0.6 percent from a record, with banks having the biggest impact across all regions. The safe-haven Swiss franc hit six-month highs.

The 10-year US Treasuries yield US10YT=RR dipped to 2.294 percent, flirting with its lowest level in the past two weeks.

As reported at 11:04 am (BST) in London, the USD/JPY was trading at 112.332 Yen, down 0.64%; the pair had earlier hit a low of 112.254 Yen while the session peak holds at a distant 113.156.

A risk-on undertone meant meagre gains for gold, with the precious metal changing hands at $1,233 per ounce. Futures for the Nasdaq 100 index declined 18.50 points to 5,704.75.

In Asian markets, Japan's Nikkei Stock Average fell 0.53 percent, Hong Kong's Hang Seng Index fell 0.17 percent, China's Shanghai Composite Index declined 0.27 percent and India's BSE Sensex rose 0.25 percent. Crude futures added 0.3 percent in NY, reversing an earlier 1.3 percent loss, before the release of USA government data on oil inventories and Iraq, together with non-OPEC nation South Sudan, backed the extension of supply cuts to balance the market.

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