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Global stock markets softened on Thursday as investors avoided risk on the eve of a speech by Federal Reserve head Jerome Powell, hotly anticipated for clues on the interest rate outlook.
The British pound, meanwhile, gained on optimism that an orderly Brexit may yet be on the cards.
"Caution is the word of the day... ahead of the key speech by the Fed chairman Jerome Powell," said analyst Naeem Aslam at trading firm ThinkMarkets.
Markets paid little attention to US President Donald Trump providing some fresh hope for China-US trade talks.
Wall Street, which posted healthy gains Wednesday thanks to blockbuster results from retailers, reversed a firm opening trend to trade slightly weaker in the late New York morning.
Minutes published Wednesday from the Fed's July meeting - when it cut rates for the first time since the financial crisis - said policymakers were flexible and borrowing costs were not on a "preset course" despite trade uncertainty and weak global growth.
"Markets remain in wait-and-see mode on Thursday, after the Fed minutes told us nothing we didn't already know," said analyst Craig Erlam at Oanda.
"The minutes on Wednesday highlighted just how difficult the current situation is, with the central bank deeply divided on the correct course of action, although there was a broad agreement that the July rate cut was a 'mid-cycle adjustment' rather than the start of an easing cycle."
Next up is Powell's address to the central bankers' symposium at Jackson Hole on Friday.
While the global economy stutters and the China-US trade row rumbles along, markets have found solace in expectations the Fed will continue to lower rates.
The minutes meanwhile made no mention of Trump's attacks on Powell's stewardship of the US central bank.
Investors drew some mild encouragement from a key PMI survey released in Brussels on Thursday pointing to improving services and manufacturing activity in the eurozone.
"Today's PMI developments suggest that the industrial slide might have begun to bottom out, which sustains hopes that, absent any external shock, activity will start to pick up moderately by the end of the year," said analysts at Oxford Economics.
In commodities, world oil had a rollercoaster day, reversing early gains as the European trading day wore on.
"Oil looks in limbo at the moment," said Erlam.
"It's been steadily rising over the last couple of weeks but not in any convincing way," he said.
In foreign exchange, the British pound spiked after Prime Minister Boris Johnson met with French President Emmanuel Macron, having held talks with German Chancellor Angela Merkel the day before.
"The pound is pushing higher after Merkel said we can find a solution to the backstop that will maintain the integrity of the single market, and uphold the principles of the Belfast Agreement 1998. The softer stance from the EU is helping sterling," said David Madden at CMC Markets.
"Who will blink?", asked Kallum Pickering at Berenberg. Johnson is "playing a game of chicken with the EU and moderate Conservatives" and "bets that the EU will seek a compromise at the final hour", he said.
