* Europe, Asia shares fall; Wall St seen opening lower
* Geopolitics drives bid for safe havens
* U.S. Treasury, Bund yields fall, highlighting caution
* Gold hits one-week high; oil steadies as Libya output
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Nigel Stephenson
LONDON, April 4 European shares edged lower on
Tuesday, after falls on Asian bourses, and low-risk government
debt yields fell as political risks from a meeting between the
U.S. and Chinese leaders to the French presidential election
kept investors on edge.
Wall Street also looked set to open in the red, according to
index futures .
The dollar edged up against a basket of major currencies but
lost half a percent against the safe-haven Japanese yen. Gold,
another asset sought in uncertain times, hit a one-week high.
"There was a tragedy in Russia and there may be some
hedging-type buying ahead of the French presidential debate and
also French elections in three weeks," said Yujiro Goto,
currency analyst with Nomura in London, on the yen's surge.
In emerging markets, the South African rand fell more than 1
percent against the dollar and bank shares fell after S&P Global
cut the country's credit rating to junk on Monday.
The pan-European STOXX 600 share index gave up
early gains and was last down 0.1 percent, after falling from a
16-month high on Monday.
Britain's FTSE 100 index, however, rose 0.4 percent.
Shares have hit record highs across the globe in recent
months, partly in anticipation of U.S. President Donald Trump
cutting taxes, easing regulation and raising infrastructure
spending in the world's largest economy.
However, Trump's struggles to push other legislation through
Congress has led some to question whether he will be able to
fully make good on his campaign pledges.
"People are not so worried about inflation, they don't think
the Fed is behind the curve. People are not so optimistic about
Trump being able to deliver quickly on his election promises
about taxes and infrastructure," said Guy Wolf, analyst at
commodities broker Marex Spectron.
Geopolitical issues, including Trump's meeting this week
with Chinese President Xi Jinping and the Monday's bomb attack
on a metro train in Russia's second-largest city of St.
Petersburg, which killed 14 people and wounded 50, also weighed
In Asia, Automaker stocks, which helped pull Wall Street
down on Monday after sub-par U.S. car sales data, were the main
drag on Tokyo shares on Tuesday; the Nikkei fell 0.9
percent to a 10-week low.
MSCI's broadest index of Asia-Pacific shares outside Japan
fell 0.4 percent, having hit a 21-month high
Yields on low risk U.S. and German government bonds fell.
falls. Benchmark 10-year U.S. Treasury yields were
down 3 basis points at 2.32 percent after falling as low as 2.31
percent, its lowest in more than a month, in Asian trade.
German 10-year yields touched their lowest
level since March 1 and last stood at 0.24 percent, down 4 bps.
Italy's bonds outperformed the rest of the euro zone on the
prospect of help for two struggling Italian lenders.
Benchmark 10-year yields fell 7.5 bps to 2.25 percent
after a European Commission spokesperson said late
on Monday said there could be a solution on a bailout.
"Italy's banking sector has been a never-ending story, so
any news pointing towards state support reduces the risk of a
more severe development that could be the beginning of a banking
crisis," said DZ Bank strategist Daniel Lenz.
French yields also fell, before a TV debate between
presidential election candidates later on Tuesday.
The dollar inched up 0.1 percent against its currency basket
but fell to as low 110.24 yen.
The euro fell 0.2 percent to $1.0650 and sterling
fell 0.4 percent to $1.2432.
The Australian dollar was 0.7 percent weaker at $0.7546
after the central bank held rates steady at a record low 1.5
percent as expected, and said growth in household borrowing,
largely for housing, was outpacing rises in household income.
South Africa's rand fell as much as 1.9 percent
before recovering to trade down 0.6 percent at 13.76 per dollar
while bank shares tumbled after the credit rating cut
in response to President Jacob Zuma's dismissal of his finance
minister, Pravin Gordhan, last week.
Gold hit a one-week high around $1,260 an ounce.
Oil prices steadied: Brent crude rose 37 cents a
barrel to $53.49.
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Nichola Saminather in Singapore,
Ritvik Carvalho, Abhinav Ramnarayan and Pratima Desai in London;
Editing by Jon Boyle and Pritha Sarkar)