– DUP N. Ireland says it could not support the deal on Brexit

Us retail sales fall for first time in 7 months

Asian shares muted after five-day rally

Asian stock markets: https://tmsnrt.rs/2zpUAr4

Hideyuki Sano and Swati Pandey

TOKYO/SYDNEY, Oct 17 (Reuters) – sterling faltered on fading hopes of a Brexit deal on Thursday, while a five-session rally in Asian shares fizzled out as weak U.S. retail sales fanned concerns about the health of the world’s largest economy.

All South Korean, Australian and new Zealand indices were in negative territory. Chinese stocks were slightly higher, while Japan’s Nikkei ended slightly lower. That left MSCI’s broadest index of Asia-Pacific shares outside Japan largely unchanged.

Investors ‘ attention was shifting to the United Kingdom, where Northern Ireland’s Democratic unionist party said it could not support the Brexit deal in its current form.

The report raised doubts that Prime Minister Boris Johnson could win the approval of his government and Britain’s fractured Parliament to leave the European Union with an agreement.

Sterling fell 0.5% to $ 1.2762 on the news, drifting from a six-month high of $ 1.2877 touched on Wednesday.

“Trading the British pound inside the day at the moment is not for the faint of heart, with deep pockets required,” said Geoffrey Halley, senior market analyst at OANDA.

“The street clearly wants to take the GBP higher on any Brexit hopes, but traders should be aware that a pullback would be just as ugly if progress stalled or collapsed once again.”

In early European trading, pan-region Euro Stoxx 50 futures were down 0.4%, German DAX futures were down 0.3%, while for London futures the FTSE added 0.1% at 7,158.

U.S. stock futures were slightly weaker.

Sentiment in the share market turned dour on Wednesday after data showed US retail sales contracted in September for the first time in seven months, in a potential sign that manufacturing-led weakness could spread to the wider economy.

Given that us consumption was one of the few remaining bright spots in the global economy, the data fanned fears that a trade and economic war between China and the US would lead to a downturn.

“It looks like the trade war has taken another toll, in addition to reducing business confidence and reducing investment spending as consumers start Smoking,” said Chris Rupkey, chief financial economist at MUFG Union Bank.

TRADE WAR

U.S. Treasury Secretary Steven Mnuchin said Wednesday that U.S. and Chinese trade negotiators are working to nail down the text of a Phase 1 trade deal for their presidents to sign next month.

But he also said there were no plans for another high-level meeting on the trade agreement scheduled last week.

“While the U.S. has suspended tariff increases, it hasn’t gone as far as lifting tariffs in General, so it’s hard to expect a rapid pick – up in the economy,” said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.

Brent crude futures fell 0.89 percent to $58.89 a barrel, while West Texas Intermediate (WTI) lost 1.03 percent to $52.81. (Additional reporting by Tomo Uetake in Sydney, Editing by Jacqueline Wong