Volkswacht Bodensee - Stocks, dollar drop as tariff talk dominates

Traders digested news also of Congress narrowly passing US President Donald Trump's signature tax and spending bill that analysts argue risks ballooning national debt and wider inflation.

On tariffs, Trump said he planned to start sending letters informing trading partners of their import levies as soon as Friday, as negotiations to avoid higher US rates entered the final stretch.

European stock markets retreated around midday, also as China said it will impose "anti-dumping" taxes of up to 34.9 percent on cognac and other brandy imported from the European Union starting from Saturday.

Asian stock markets closed out the week mixed.

Oil prices extended losses, with OPEC and the cartel's crude-producing allies expected this weekend to announce a rise to output.

The main focus heading into next week was on Trump's tariff plans.

"We draw ever closer to Wednesday's reciprocal tariff deadline, and thus traders are likely to grow jittery despite the tentative signals of a potential pathway to a deal," noted Joshua Mahony, chief market analyst at Rostro trading group.

Governments around the world have fought to hammer out tariff deals with Washington after Trump unveiled a blitz of levies in early April.

He and his top officials have said several were in the pipeline, but only Britain and Vietnam have signed pacts.

China has agreed to a framework for it and the United States to slash tit-for-tat tolls and ship certain products.

The prospect that trading partners from Japan and South Korea to India and Taiwan could be hit with stiff tariffs fuelled fresh worries about the global economy.

Uncertainty leading up to next week's cut-off tempered the positive lead from another record Thursday on Wall Street, where a forecast-busting US jobs report soothed worries about the world's top economy.

It dented the prospect of the Federal Reserve cutting interest rates at its July policy meeting, with bets now on two reductions before the end of the year -- the first likely in September.

However, analysts suggested that all was not what it seemed, pointing to softness in the private sector.

"We think that private-sector hiring has stalled, and we may see sporadic layoffs in some industries in the coming months," warned analysts at Japanese financial group MUFG.

"Despite the unemployment rate having fallen... the flow of potential workers that remained out of the labour force rose sharply in June, further highlighting the weak hiring environment.

"We continue to view labour demand as being fundamentally weak relative to the past several years," they added.

Wall Street will be closed on Friday for the US Independence Day holiday.

- Key figures at around 1045 GMT -

London - FTSE 100: DOWN 0.3 percent at 8,797.25 points

Paris - CAC 40: DOWN 0.8 percent at 7,690.02

Frankfurt - DAX: DOWN 0.6 percent at 23,784.66

Tokyo - Nikkei 225: UP 0.1 percent at 39,810.88 (close)

Hong Kong - Hang Seng Index: DOWN 0.6 percent at 23,916.06 (close)

Shanghai - Composite: UP 0.3 percent at 3,472.32 (close)

New York - S&P 500: UP 0.8 percent at 6,279.35 (close)

Euro/dollar: UP at $1.1778 from $1.1755 on Thursday

Pound/dollar: UP at $1.3651 from $1.3642

Dollar/yen: DOWN at 144.37 yen from 145.06 yen

Euro/pound: UP at 86.28 pence from 86.14 pence

West Texas Intermediate: DOWN 0.9 percent at $66.40 per barrel

Brent North Sea Crude: DOWN 0.9 percent at $68.19 per barrel

B.Wyler--VB