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* Trump says China wants to return to the negotiating table
* Markets rebound after Friday killings, tough Asian session
* The yuan reaches a record and then recovers somewhat
* Safe havens remain well supported by worried investors
* Chart: Global exchange rates in 2019 http://tmsnrt.rs/2egbfVh
By Tommy Wilkes and Dhara Ranasinghe
LONDON, August 26 (Reuters) – Stock markets recovered on Monday, but confidence remained fragile after the latest outbreak of the US-China trade war that prompted investors to rush into state bonds and to weigh on emerging market currencies.
European stock markets seemed poised to follow Asian markets deep in the red, but they recovered when US President Donald Trump decided to ease tensions with China after more tariffs – announced abruptly on Friday – heightened concern over the impact of the conflict on global growth.
Speaking on the sidelines of a summit gathering leading French industrialized nations, Mr Trump hailed Chinese President Xi Jinping as a great leader and praised his desire to conclude a trade deal. and calm the nerves of investors. Beijing called for calm.
Wall Street futures rebounded, with the S & P 500 mini-electronics up 0.5% from the opening.
European stock markets were mixed, with the pan-European Eurostoxx registering a slight decline that day. The German DAX rose by 0.29%, while that of France rose by 0.5%. London markets were closed for holidays.
Shares had fallen sharply in Asia before Trump spoke, as investors worried that the latest tariffs could hurt global growth. On Friday, Trump announced an additional $ 550 billion worth of targeted Chinese goods a few hours after China unveiled US $ 75 billion worth of retaliation for US goods.
The MSCI World Equity Index, which tracks stocks in 47 countries, remained 0.3% lower at 1205 GMT.
"Trump is potentially exposed to a slowdown in the US economy that prevents him from being re-elected. He is aware of this and therefore reacts to volatile markets with lighter words," said Chris. Bailey, European strategist at Raymond James.
"The Chinese saw it blink and filed it later, and in the shorter term, I think it is the basis of a tentative agreement", he adds.
Despite the more positive tone of the stock markets, assets considered safe havens are still well managed. The yield on 10-year US Treasury bonds hit a new low in three years, at 1.449%, before rising to 1.518% – a level slightly lower than the day.
It's about 50 basis points so far this month.
The price of gold, which has risen sharply in recent months as nervous investors flocked to the precious metal, hit its highest level since April 2013 and was up 0.3% at 1,531. $.
German Bund yields reversed earlier declines. The 10-year bond issue rose 1 basis point to -0.664%, after falling to -0.70%.
Yuan: 11 years older
Emerging market currencies were among the main victims of the latest volatility induced by the trade war.
The Chinese yuan reached its lowest level in 11 years on the onshore market and reached a record level in offshore trading. It then recovered somewhat in the offshore market but remained 0.3% lower at 7.15225 yuan for one dollar.
The Turkish lira lost more than 1% to more than 5.8 against a dollar Monday, after briefly slipping to 6.47 in what market observers have described as a "flash crash", as Japanese investors reduced their exposure to riskier assets.
The reading was down 0.8% to 5.8130.
Elsewhere in the foreign exchange markets, the Japanese yen hut hit a new record of 104.46 yen per dollar, hitting its highest level in seven months, before reversing those gains to trade down 0.5 % at 105.86, while calm returned to the markets.
The dollar generally advanced and was up 0.2% against the euro, at US $ 1.117.
As investors attempt to resolve the two-year-old global economy's one-year-old trade dispute, some are choosing to reduce their exposure to equities, arguing that the battle weighs heavily on global growth.
"The downside risks are increasing for both the global economy and markets," said Mark Haefele, Global Head of Investment at UBS. "As a result, we are reducing the risk of our portfolios by underweighting equities to reduce our exposure to political uncertainty."
German business confidence has deteriorated more than expected in August to reach its lowest level since November 2012, revealed Monday a survey by the German Ifo Institute.
The latest trade escalation eclipsed last week's commitment by Fed Chairman Jerome Powell to "take the necessary steps" to maintain the health of the US economy, but without commit to lowering rates.
Market prices are now fully taken into account: at least a quarter of a reduction from the Fed in September and more than 120 basis points of easing by the end of 2020.
Oil prices, which had already fallen for fear that the tariff dispute would dampen global demand, have recovered in European trade.
Futures in Brent rose 0.67% to $ 59.74 per barrel while US crude increased 1.02% to $ 54.72 per barrel. (Edited by Mark Heinrich and Toby Chopra)
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