Stock Markets Play Waiting Game before Speech of U.S. Federal Reserve Head

European and Asian  stock markets faltered Thursday on the eve of a speech from  Federal Reserve head Jerome Powell for clues on the outlook for U.S. interest rates.

"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 were unmoved by U.S. President Donald Trump providing yet more fresh hope for China-U.S. trade talks.

Wall Street ended Wednesday with healthy gains thanks to blockbuster results from retailers that indicated strong consumer demand.

Investors turned cautious Thursday before Powell's address to the central bankers' symposium at Jackson Hole on Friday.

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.

While the global economy stutters and the China-U.S. 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 constant attacks on Powell's stewardship of the US central bank.

"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."

In the commodities sphere, world oil prices extended recent gains on optimism over US-China trade talks and U.S. interest rate cut hopes.

However, Erlam sounded a cautious note.

"Oil looks in limbo at the moment. It's been steadily rising over the last couple of weeks but not in any convincing way, which suggests traders are waiting around for the next sell-off," he said.

- Key figures around 1045 GMT -

London - FTSE 100: DOWN 0.5 percent at 7,165.89 points

Frankfurt - DAX 30: DOWN 0.2 percent at 11,783.38

Paris - CAC 40: DOWN 0.4 percent at 5,413.13

EURO STOXX 50: DOWN 0.2 percent at 3,387.49 

Tokyo - Nikkei 225: UP 0.1 percent at 20,628.01 (close)

Hong Kong - Hang Seng: DOWN 0.8 percent at 26,048.72 (close)

Shanghai - Composite: UP 0.1 percent at 2,883.44 (close)

New York - Dow: UP 0.9 percent at 26,202.73 (close)

Euro/dollar: DOWN at $1.1080 from $1.1085 at 2100 GMT on Wednesday

Pound/dollar: DOWN at $1.2128 from $1.2130

Euro/pound: DOWN at 91.37 pence from 91.39 pence 

Dollar/yen: DOWN at 106.39 yen from 106.62 yen

Brent North Sea crude: UP 49 cents at $60.79 per barrel

West Texas Intermediate: UP 41 cents at $56.09