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LONDON, Nov 16 (Reuters) - Global stocks pared losses and the dollar fell connected Wednesday aft U.S. President Joe Biden told G7 and NATO partners that a rocket blast successful Poland was caused by a Ukrainian defence missile, dispelling fears that it originated from Russia.
Initial alleviation among investors was capable to promote immoderate flows backmost into equities and commodities, but with interest inactive simmering implicit the chances that the Ukraine struggle could spill into neighbouring countries, hazard assets struggled to summation overmuch upward momentum.
The MSCI All-World scale (.MIWD00000PUS) was virtually unchanged connected the day, having fallen by arsenic overmuch arsenic 0.2% overnight erstwhile quality of the explosion, which killed 2 people, broke.
"The halfway content is inactive this isn't going to origin an escalation. This is immoderate it was, but it was not an onslaught connected Poland and Biden’s comments took the hostility retired of it," Societe Generale strategist Kit Juckes said.
When the rocket struck, NATO subordinate Poland archetypal said a Russian-made rocket was liable and summoned Russia's ambassador to Warsaw for an mentation aft Moscow denied it was responsible.
The dollar, which acts a harmless haven successful times of geopolitical oregon marketplace turmoil, rallied arsenic overmuch arsenic 0.7% overnight, earlier tracking little successful European trading and was past down 0.3% against a handbasket of large currencies .
"The archetypal absorption was understandable fixed that immoderate deliberate onslaught connected a NATO subordinate would people an tremendous escalatory step," Deutsche Bank strategist Jim Reid said.
"It soon became evident that this was highly improbable to beryllium a nonstop attack, and the overnight comments mentioned astatine the apical suggest a accelerated de-escalation."
Biden said the United States and its NATO allies were investigating the blast but aboriginal accusation suggested it whitethorn not person been caused by a rocket fired from Russia.
European shares slipped, with the STOXX 600 (.STOXX) down 0.1%, portion Germany's DAX (.GDAXI) dropped 0.7% and Britain's FTSE 100 (.FTSE) roseate 0.3%.
U.S. banal futures edged higher, with S&P 500 e-minis and Nasdaq 100 futures some up 0.1%.
The euro was past up 0.6% connected the time astatine $1.0411, portion sterling was astir level astatine $1.1865, aft UK information showed user ostentation picked up by a batch much than expected successful October.
With geopolitical tensions injecting immoderate volatility into the broader markets, benchmark 10-year Treasury yields were astir unchanged connected the time astatine 3.807%. On Tuesday, yields fell to their lowest successful implicit a month.
Gold roseate 0.2% connected the time to $1,776 an ounce, buoyed by a weaker dollar, portion crude lipid roseate 0.3% to $94.07 a barrel, having fallen to an overnight debased of $92.85.
Additional reporting by Xie Yu; Additional reporting by Ankur Banerjee; Editing by Edwina Gibbs, Edmund Klamann & Simon Cameron-Moore
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