By Jeremy Gaunt, European Investment Correspondent
LONDON, April 29 (Reuters) - Oil fell back from recent
record highs on Tuesday but was still around $118 a barrel while
equity markets slipped as investor prepared for a raft of U.S.
economic data and a Federal Reserve decision on interest rates.
The dollar gained slightly against major currencies. Markets
in Japan were closed for a national holiday.
The price of crude oil dipped after hitting a record of
$119.93 a barrel on Monday on supply snags in Nigeria and
Britain. U.S. light crude for June delivery <CLc1> was down 77
cents at $117.83 a barrel.
"The issues in Nigeria and North Sea are significant but
these outages tend to be overcome pretty quickly, so I think the
market is taking profit from record prices," said Mark Pervan, a
senior commodities analyst at the Australian & New Zealand Bank.
Nigeria's crude oil output was cut by around half on Monday
by striking workers at Exxon Mobil Corp <XOM.N> and recent
attacks by rebels on Royal Dutch Shell <RDSa.L> operations.
In Britain, a North Sea crude pipeline, which carries nearly
half of the country's oil, was closed on Monday due to a strike.
World stock markets were slightly lower, although MSCI's
main world equity index <.MIWD00000PUS> is up more than 3.5
percent this month around three-month highs.
European stocks were flat, close to two-month highs reached
on Monday, hurt by weakening banks after Deutsche Bank
<DBKGn.DE> unveiled more writedowns.
But falls were limited by rising energy shares, buoyed by
strong earnings from BP <BP.L> and Royal Dutch Shell <RDSa.L>.
The FTSEurofirst 300 <> index of top European shares
was down less than 0.1 percent
Deutsche Bank posted its first quarterly loss in five years
and said it made further writedowns of 2.7 billion euros ($4.23
billion).
FED WATCH
Investors have been gaining confidence recently on an
increasing belief that the worst of the credit crisis has past
and that central banks will do what it takes to solve global
financial and economic stresses.
UBS said in a note on Monday that its indicators for stocks,
fixed income and currencies all showed increased risk appetite
last week.
"There has been an unmistakeable return of investor optimism
in the last two weeks," UBS analysts concluded [].
Investors are thus looking for as much evidence as they can
find to back their tentative, new-found optimism.
U.S. consumer confidence data later in the day will be one
marker.
Another will be what the Fed says on Wednesday when it is
expected to cut interest rates by 25 basis points to 2.00
percent. It may signal a pause in rate cutting.
The dollar generally gained on such a view. The euro was
down around 0.7 percent at $1.555.
"It looks as though the U.S. is further advanced in the
economic cycle and so closer to the recovery phase," said Adam
Cole, global head of currency strategy at RBC Capital Markets.
Euro zone government bond prices were generally higher.
Two-year Schatz yielded 3.810 percent <EU2YT=RR>, 2.5 basis
points lower than in late Monday trade, while the 10-year Bund
yield <EU10YT=RR> was 3.6 basis points down at 4.175 percent.
(Editing by Mike Peacock)
