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- World stock markets rallied Thursday after China fixed its reference rate at a stronger level than expected and released positive trade data for July.
- Oil prices rebounded after Saudi Arabia said it was considering all options to stave off further declines.
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World stock markets rallied Thursday after China took steps to calm investors rattled by an escalating trade war. The world’s second-largest economy also released better-than-expected trade data.
China fixed its daily reference rate at a stronger level than analysts expected — though it still exceeded the psychologically important 7 yuan to the US dollar, according to Bloomberg. Chinese trade data for July also showed a rebound in exports and a smaller-than-expected drop in imports, according to Reuters. Traders may also have decided the recent equities sell-off was overdone or reacted to the slump in Treasury yields over the past week.
Oil prices, which have plunged by more than 15% since late July, also rebounded after Saudi Arabia said it was talking to other oil producers and considering all options to stave off further declines, according to Bloomberg.
The stock-market rally could prove short-lived given the worsening outlook for US-China trade relations. The Trump administration is set to slap 10% tariffs on $300 billion worth of Chinese goods at the start of September.
China does not intend to buy American agricultural products as the US desires and therefore expects those tariffs to rise to 25%, the Fox News correspondent Edward Lawrence tweeted on Wednesday, citing Chinese trade sources.
“Washington’s repeated bullying has made it meaningless to continue trade talks in short run,” Hu Xijin, the editor of China’s state-controlled Global Times, tweeted. “China and the US are caught in a stalemate worse than last round.”
Here’s the market roundup as of 9:53 a.m. EST:
- US stocks opened higher with the Dow Jones Industrial Average up 0.4%, the S&P 500 up 0.6%, and the Nasdaq up 0.7%.
- European equities climbed, with Britain’s FTSE 100 up 0.7%, Germany’s Dax up 1%, and the Euro Stoxx 50 up 1.3%.
- Asian markets rallied, with China’s Shanghai Composite up 0.9%, Japan’s Nikkei up 0.4%, and Hong Kong’s Hang Seng up 0.5%.
- Oil prices rebounded, with West Texas Intermediate crude up 2.2% at $52.20 a barrel and Brent crude up 1.3% at about $57.
Credits: Business Insider