European stocks opened lower Wednesday, while U.S. equity futures suggest heavy selling at the start of trading on Wall Street, as investors brace for what could be an escalating global trade war after a key economic adviser to President Donald Trump abruptly left the White House yesterday after failing to convince him to reverse plans for import tariffs on steel and aluminium. 

Gary Cohn's departure from the Trump Administration sent markets in Asia lower and Europe, where most benchmarks opened around 0.5% to to downside at the start of trading Wednesday. Cohn, the director of the National Economic Council and a staunch advocate for free trade who has clashed with the President on a number of issues during his tenure at the White House, was reportedly unable to publicly support Trump's plans to slap a 25% levy on imported steel and a 10% tariff on non-American aluminium.

The Stoxx Europe 600 index, the region's broadest measure of share prices, fell 0.21% in the opening two hours of trading, although Germany's DAX performance index started to claw back earlier losses and was trading little-changed from its Tuesday close a 12,100 points by mid-morning in Frankfurt. Britain's FTSE 100 was fighting hard to hold onto gains, weaker oil and basic resource stocks, which are heavily-weighted on the U.K. benchmark, and was quoted a few points into the green by 10:30 am local time. 

Early indications from U.S. equity futures are pointing to a 320-plus point decline for the Dow Jones Industrial Average after last night's modest gain and a 24.75 point, or 0.9%, pullback for the broader S&P 500. Safe-haven assets such as U.S. Treasury bonds, where benchmark 10-year yields fell 2 basis points to 2.86%, the yen and the euro were trading higher as a result, while the dollar index, which gauges the greenback against a basket of six global currencies, fell 0.17% to a two-week low of 89.49.

Trump described Cohn, a former Goldman Sachs executive, as a "rare talent" and thanked him for his service, but told a press conference following a meeting with the Prime Minister of Sweden that "many, many people want every single job (at the White House.) I could take any position in the White House and I'll have a choice of the 10 top people having to do with that position. Everybody wants to be there."

Will be making a decision soon on the appointment of new Chief Economic Advisor. Many people wanting the job - will choose wisely!

— Donald J. Trump (@realDonaldTrump) March 7, 2018

Overnight in Asia, markets reacted swiftly, loping more than 0.65% from the region-wide MSCI Asia ex-Japan index and sending the Nikkei 225 index in Japan to a 0.77% loss that put the benchmark at 21,252.72 and sent domestic steel-making stocks to an eight-month low. 

"In a so-called trade war, driven by reciprocal increases of import tarifs, nobody wins, one generally finds losers on both sides," IMF Managing Director Christine Lagarde told France's RTL radio Wednesday. ""We recommend an agreement between the different parties, and talks, talks."

Concerns over the pace of global trade in the months ahead, as well as the dollar's overnight weakness, put pressure on crude prices in overnight Asia trading ahead of the U.S. Energy Information Administration's report on domestic inventories later in the session. The non-official American Petroleum Institute said Tuesday that U.S. crude stocks swelled by 5.66 million barrels in the week ending March 2.

Brent crude futures for May delivery, the global benchmark, were seen 54 cents lower at $65.29 per barrel at the start of European trading while WTI contracts for April fell 5 cents per barrel to $62.15.

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