NEW YORK: A global gauge of equities rose on Monday and the dollar recovered from earlier losses as US President Donald Trump said Chinese officials had contacted Washington about resuming trade negotiations, after signs of escalation in the US-China trade dispute had roiled markets earlier in the day.

Trump’s comments followed Chinese Vice-Premier Liu He’s remarks that China was willing to resolve the trade dispute through “calm” negotiations. European stocks bounced off their lows upon the easing of rhetoric between Washington and Beijing, and US stocks opened higher.

Previously, Asian equity markets had plummeted and European stocks had appeared set to follow suit after China and the US announced further tariffs on each other’s exports. On Friday, Trump announced an additional duty on some $550 billion of targeted Chinese goods, hours after China unveiled retaliatory tariffs on $75bn worth of US goods.

On Wall Street, the Dow Jones Industrial Average rose 190.17 points, or 0.74 per cent, to 25,819.07, the S&P 500 gained 20.99 points, or 0.74pc, to 2,868.1 and the Nasdaq Composite added 70.02 points, or 0.9pc, to 7,821.78.

The pan-European STOXX 600 ended little changed, while the MSCI All-Country World Index gained 0.12pc.

Even as equities recovered from earlier declines, some safe-haven assets remained well supported. US Treasury yields dipped, while spot gold added 0.2pc to $1,529.81 an ounce.

Yields slip

Yields on 10-year Treasury notes were down at 1.48pc, having dived from a top of 1.66pc on Friday, and leaving them almost matching two-year yields.

The drop in yields initially swept the legs out from under the dollar, which slid 0.5pc on Friday against a basket of currencies and was last trading at 97.654.

It took an early hit on the yen to touch 104.47, but pared the losses as the session wore on and was last at 105.21. The next major chart point is a low around 104.10 briefly touched during the “flash-crash” of early January.

In currency markets, however, the safe-haven Japanese yen fell 0.5pc to 105.95 against the dollar after having rallied to a new seven-month high of 104.46 yen per dollar.

The dollar index rose 0.36pc.

Published in Dawn, August 27th, 2019