By David Randall
NEW YORK, Aug 8 (Reuters) - Stronger-than-expected Chinese
export data helped push global stock markets higher on Thursday
following a volatile week that had investors scrambling for
safety due to fears of a worldwide economic pullback.
Investors were encouraged by data showing Chinese exports
rose 3.3% in July from a year earlier, beating an expected
decline of 2%. Chinese imports fell less than forecast, despite
the U.S.-China trade war. Markets went into a tailspin on Monday after China let its
currency weaken beyond 7 yuan per dollar, a surprise move that
investors took as retaliation for U.S. President Donald Trump's
announcement of more tariffs on Chinese imports.
Investors fear the trade conflict between the world's two
biggest economies will cause a global recession. Bond markets
have flashed red and a closely watched U.S. recession indicator
reached its highest level since March 2007 "There's a little bit of calm back in the market at the
moment," said Peter Kinsella, global head of FX strategy at UBP.
"But the ball is very much in Trump's court."
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.98% following broad gains in Europe. The index remains
down 1.6% for the week and more than 3% since the start of
August.
On Wall Street, the Dow Jones Industrial Average .DJI rose
172.64 points, or 0.66%,ed 158.25 points, or 0.61%, to
26,179.71, the S&P 500 .SPX gained 30.55 points, or 1.06%, to
2,914.53 and the Nasdaq Composite .IXIC added 106.41 points,
or 1.35%,as up 97.57 points, or 1.24%, to 7,969.23.
Investors have rushed into the safety of bonds this week as
fears of a recession jumped. Yields on U.S. 30-year Treasury
bonds US30YT=RR fell as low as 2.123% overnight, not far from
a record low of 2.089% set in 2016. Ten-year yields US10YT=RR
dropped further below three-month rates, an inversion that has
reliably predicted recessions in the past. US/
Benchmark 10-year notes US10YT=RR last fell 18/32 in price
to yield 1.7533%, from 1.691% late on Wednesday.
The Philippines became the latest country to cut interest
rates, following aggressive moves by central banks in New
Zealand, India and Thailand that had surprised markets on
Wednesday. "Financial markets are raising risks of recession," said
JPMorgan economist Joseph Lupton. He said the "alarm bell" was
loudest in the government bond market.
Few investors think the United States and China will be able
to resolve their trade dispute any time soon and many are
bracing for another confrontation.
"This most recent escalation in the U.S.-China trade clash
has increased the risk of a complete fallout in the negotiations
considerably," said Vasileios Gkionakis, a strategist at Lombard
Odier, adding that the probability of a "deal breakdown" had
increased to 40% from 25% previously.
Gold has surged this week as investors scrambled to find
somewhere safe to park their cash, rising above $1,500 for the
first time since 2013.
The dollar was steady, trading at $1.1196 EUR=EBS against
the euro.
Oil prices regained some ground on expectations that falling
prices could lead to production cuts. O/R Brent crude LCOc1 climbed 1.6% to $57.13, which followed
steep losses on Wednesday. U.S. crude CLc1 rallied 2.5% to
$52.35 a barrel.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets in 2019 http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Global bonds dashboard (DO NOT USE UNTIL UPDATE FOUND) http://tmsnrt.rs/2fPTds0
Emerging markets in 2019 http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>