European stocks slipped lower Tuesday, while U.S. equity futures weakened modestly, as investors move the sidelines ahead of this week's Thanksgiving holidays amid a stronger U.S. dollar and political uncertainty in Germany.
The Stoxx Europe 600 index, the region's broadest measure of share prices, was marked 0.18% lower at 385.69 points in the opening hour of trading, while major European benchmarks such as Germany's DAX and France's CAC-40 traded marginally lower on thinner-than-usual volumes. Britain's FTSE 100 was marked 0.1% lower as gains were held in check by a flat pound sterling, which was marked at 1.3250 against the greenback near the end of the Asia session.
Early indications from Wall Street futures suggest a flat open for both the Dow Jones Industrial Average and the broader S&P 500 ahead of existing home sales data for the month of October and fourth quarter earnings from Hewlett Packard Enterprises (HPE) , Hormel Foods (HRL) , Lowe''s Companies Inc. (LOW) and Salesforce.com (CRM)
Overnight in Asia, the U.S. dollar index, a measure of the greenback's strength against a basket of six global currencies, was marked nominally higher at 94.04 as higher U.S. Treasury bond yields -- levels on 2-year notes hit 1.755%, the highest since 2008 -- and a weakening euro boosted its appeal.
The euro's extended declines against the dollar Monday were linked to both dovish testimony from European Central Bank President Mario Draghi to lawmakers in Brussels Monday and comments from Germany's Chancellor Angela Merkel that she would prefer fresh elections in the new year in favor of trying to form a minority government.
Speaking as part of his regular appearances before the Economic and Monetary Affairs Committee of the European Parliament, Draghi repeated his view that consumer prices in the currency area remain tepid and haven't translated into faster wage growth despite an improving labor market and solid economic growth. He also indicated that the Bank's €2.4 trillion ($2.8 trillion) quantitative easing program was "flexible enough" to be adapted if geopolitical risks were to cause tighter financial conditions in the Eurozone.
The euro was marked at 1.1734 in early London trading, around 0.1% lower than its Monday levels and just a few pips from the two-month low of 1.1722 is touched in Monday's Asia session.
The currency moves helped the MSCI Asia ex-Japan benchmark rise 0.15% into the end of the session and push the export-focused Nikkei 225 in Japan 0.6% high at the final bell to close at 22,416.48 points.
The most notable market mover in Asia trading, however, were shares in Tencent Holdings Ltd. (TCEHY) after it hit another major milestone when it became the first Asia listed tech company to reach a market valuation of $500 billion, besting rival Alibaba Holding Ltd (BABA) and topping Facebook Inc. (FB) in the emerging battle for global social media dominance.
Tencent shares closed 2.38% higher in Hong Kong trading at HK$430 each, extending their year-to-date gain past 125% and giving the company a market capitalisation of just over HK$4.08 billion ($522 billion), edging past Facebook's close of $519 billion and Alibaba's $484.5 billion.
The stock has risen more than 11% since China's internet gaming giant -- and significant Snap Inc. (SNAP) shareholder -- posted much stronger-than-expected third quarter earnings on Thursday Nov. 16 and pledged to stoke investment into its lucrative online content machine.
Global oil prices edged higher in Europe after a tepid Asia session with investors focused on next week's meeting of OPEC members in Vienna for signals that that cartel is prepared to either extend or deepen their agreed 1.8 million barrels per day in production cuts beyond the March 2018 deadline.
Brent crude futures for January delivery were seen 0.88% higher at $62.67 while WTI futures for the same month, the benchmark for U.S. prices, were 0.51% ahead of their Monday close at $56.70 per barrel.