(Updates to close of U.S. markets)
* Stocks rebound after tough Asian session
* Offshore yuan hits record low before partial recovery
* Gold eases from six-year high; yen falls
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By April Joyner
NEW YORK, Aug 26 (Reuters) - A global gauge of equities
edged higher on Monday and the dollar rebounded after U.S.
President Donald Trump said Chinese officials had contacted
Washington about resuming trade negotiations.
His remarks appeared to restore some equilibrium following
signs of escalation in the U.S.-China trade dispute that had
roiled markets earlier in the day.
Trump's comments after the G7 summit of world leaders in
France followed Chinese Vice Premier Liu He's remarks that China
was willing to resolve the trade dispute through "calm"
negotiations. Beijing, however, declined to confirm that Chinese
officials had contacted their U.S. trade counterparts.
U.S. stocks rose more than 1% on the easing of rhetoric
between Washington and Beijing, while European stocks recovered
most of their early losses. As investors returned to riskier
assets, U.S. Treasury yields bounced off session lows, while the
Japanese yen reversed course to trade lower against the dollar
and gold eased from a six-year high.
The dollar index .DXY also shed losses to trade higher,
last rising 0.4%. The Chinese yuan, which had fallen to an
11-year low in the onshore market and hit a record low in the
offshore market, pared losses. In the offshore market, the
Chinese yuan CNH= was last down 0.5% at 7.1683 per dollar.
"Everything changed on a dime when President Trump talked
about meeting with the Chinese again," said Keith Lerner, chief
market strategist at SunTrust Advisory Services in Atlanta.
Asian equity markets plummeted and European stocks had
appeared set to follow suit after China and the United States
announced further tariffs on each other's exports on Friday.
Trump had announced an additional duty on some $550 billion of
targeted Chinese goods, following the U.S. market close, hours
after China unveiled retaliatory tariffs on $75 billion worth of
U.S. goods. Another development at the G7 summit pressured oil prices,
as French President Emmanuel Macron said preparations were
underway for a meeting between Iranian President Hassan Rouhani
and Trump in the coming weeks to find a solution to their
nuclear standoff. The prospect of a deal between Washington and
Tehran bolstered the outlook for increased supply of Iranian
crude. U.S. crude CLcv1 settled 53 cents lower, or 0.98%, at
$53.64 a barrel, while Brent LCOcv1 settled 64 cents lower, or
1.08%, at $58.70 a barrel.
On Wall Street, the Dow Jones Industrial Average .DJI rose
269.93 points, or 1.05%, to 25,898.83, the S&P 500 .SPX gained
31.27 points, or 1.10%, to 2,878.38 and the Nasdaq Composite
.IXIC added 101.97 points, or 1.32%, to 7,853.74.
The MSCI All-Country World Index .MIWD00000PUS gained
0.30%.
Even with Monday's gains in equities, some market watchers
remained cautious on the extent of progress in U.S.-China trade
relations. Peter Kenny, founder of Kenny's Commentary LLC and
Strategic Board Solutions LLC in New York, noted that the
advance in U.S. stocks came in relatively thin trading volume.
"This is not a healthy bounce, and it is across virtually
all the major indexes, so it is an indication the momentum for
U.S. equities remains biased to the downside," Kenny said.
Benchmark 10-year Treasury notes US10YT=RR last fell 4/32
in price to yield 1.5401%, from 1.527% late on Friday. The yield
curve between two-year and 10-year Treasuries inverted as an
upcoming auction of two-year notes on Tuesday gave a further
boost to shorter-dated yields. The safe-haven Japanese yen JPY= fell 0.7% to 106.09
against the dollar after having rallied to a seven-month high.
Spot gold XAU= rose 0.15% to $1,528.35 an ounce.