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Premarket: Stocks steady as focus on Jackson Hole keeps market cautious

A trader works on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on Aug. 23, 2017 in New York.

BRYAN R. SMITH/AFP/Getty Images

World stocks steadied on Thursday after two turbulent weeks as geopolitical worries eased in Asia and caution prevailed on the day the annual Jackson Hole gathering of central bankers gets underway.

The MSCI World index, which fell to a five-week low on Monday, was down 0.05 per cent. Gains by cyclical stocks helped Europe's benchmark STOXX 600 index inch up 0.2 per cent.

MSCI's broadest index of Asia-Pacific shares outside Japan also gained, shaking off jitters that gripped markets after U.S. President Donald Trump threatened to shut down the U.S. government and end the North American Free Trade Agreement.

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Trump said on Tuesday he would be willing to risk a government shutdown to secure funding for a wall along the Mexico border. Those comments came before a late-September deadline to raise the U.S. debt ceiling or risk defaulting on debt payments.

Fitch Ratings said on Wednesday failure to raise the debt ceiling soon would lead it to review the United States' sovereign rating with "potentially negative implications .

But Japan's Nikkei fell 0.4 per cent, dragged down a stronger yen and by steel makers, after reports that the country's biggest producer was cutting prices.

Markets were focusing on the central banking conference in Jackson Hole, Wyoming, where Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi were both due to speak, although new policy messages were considered unlikely.

Still, "there are concerns about what central bankers will say as the market appears stretched, especially Wall Street, where valuations look to have reached a limit," said Enrico Vaccari, a fund manager at Italy's Consultinvest.

Vaccari said he saw risks of a stock market correction after Jackson Hole that was unlikely to leave Europe stocks unscathed, even though valuations in the regions had become attractive again compared with their U.S. peers.

"Europe can't make it on its own, especially because of the super-euro," he said.

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The dollar edged up against some other major currencies after falling on worries about a possible U.S. government shutdown. The dollar is down 14 per cent against the euro this year.

The dollar index, which tracks the U.S. currency against a basket of six other major currencies, gained 0.2 per cent to 93.311 on Thursday, following the previous day's 0.4 per cent slide.

The euro slipped 0.1 per cent at $1.17935, after climbing 0.4 per cent on Wednesday on surveys that showed German and French manufacturing and services were expanding .

In commodities, oil was steady, holding on to most of their recent gains after another fall in U.S. crude inventories indicated a tighter market, and as a tropical storm headed towards oil producing facilities in the Gulf of Mexico.

Brent crude futures, the international benchmark for oil prices, were trading flat at $52.58 per barrel.

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