(Updates prices, adds comment)
* Oil slides more than 2 pct
* Sterling falls to 2-month lows vs dollar
* Tough EU talk from UK's May boosts global bond prices
By Gertrude Chavez-Dreyfuss
NEW YORK, Jan 9 Oil prices fell on Monday on
fears that record Iraqi crude exports and growing U.S. output
could undermine OPEC's efforts to reduce supply, while sterling
slumped on comments by British Prime Minister Theresa May
suggesting what could be an aggressive exit from the European
Sterling was the big mover in the currency market, falling
nearly 1 percent against the dollar to more than two-month lows
after May's remarks. May said she was willing to sacrifice the
country's single-market membership for more control over its
U.S. Treasury yields, meanwhile, retreated in line with
British bond yields after May's comments.
The drop in oil prices weighed on energy stocks on Wall
Street as the Dow Jones Industrial Average moved further from
hitting the historic and widely awaited 20,000 mark.
"With the big numbers coming out of the southern port of
Basra for December... it's implying that Iraq may be the first
big crack in the wall of the OPEC agreement," said Robert
Yawger, director of the futures division at Mizuho Securities
OPEC agreed in November to cut supplies for the first time
since the global financial crisis more than eight years ago.
In early afternoon trading, Brent crude fell $1.66,
or 2.87 percent, at $55.44 a barrel, while U.S. crude futures
slid slid 2.96 percent to $52.39 per barrel.
In the U.S. equity market, the Dow Jones Industrial Average
fell 46.09 points, or 0.23 percent, to 19,917.71, while
the S&P 500 was down 3.68 points, or 0.16 percent, at
A gain in technology stocks lifted the Nasdaq Composite
to an intra-day record high, last trading up 0.2 percent
U.S. government bond prices rose, with the 10-year note
up 9/32 in price to yield 2.382 percent, compared
with 2.418 percent late on Friday.
In line with U.S. Treasuries, German 10-year yields
, the benchmark for euro zone borrowing costs, fell
and last stood at 0.27 percent.
Analysts said a soft dollar weighed on U.S. Treasuries
yields. The dollar slid against the safe-haven yen as risk
appetite declined, while sterling sank to more than two-month
lows after May's remarks.
Sterling was last down 0.9 percent at $1.2166.
"Anything that suggests a hard Brexit is more likely... is
very damaging to UK growth prospects," said Richard Franulovich,
senior currency strategist at Westpac Banking Corp in New York.
The dollar index, which tracks the greenback versus
a basket of six currencies, fell 0.3 percent, to 101.93. The
greenback also fell 0.7 percent against the yen to 116.10
The euro was last up 0.4 percent, at $1.0569, while
Europe's broad FTSEurofirst 300 index dropped 0.50
percent to 1,437.72.
In Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan rose 1.1 points or 0.25 percent,
to 438.77. Australia's S&P/ASX200 rose 0.9 percent while
Hong Kong shares rose 0.2 percent.
Trading was light because Japan was shut for a holiday.
The MSCI world equity index, which tracks
shares in 45 nations, fell 0.13 percent to 429.11.
A focus for the week will be a news conference on Wednesday
at which U.S. President-elect Donald Trump may give more details
about the policies he will seek to implement after he takes
office on Jan. 20.
Expectations of more economic stimulus from a Trump
administration have helped to boost U.S. stocks and bond yields.
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Catherine Ngai, Sam Forgione, and Richard Leong in New York,
Yashaswini Swamynathan in Bengaluru; Editing by Bernadette Baum
and Dan Grebler)