Global stocks rebound as China's recovery boosts optimism in the middle of the trade war

Global equities stabilize as China bounces on investment restraint, central bank signals for liquidity support

China stocks up for worst month in 2.5 years as the yuan plunges The euro posts solid gains against the US dollar after EU leaders have reached a framework agreement on the migration crisis, easing domestic political pressure on the economy. German Angela Merkel

Stock markets should rebound after the second phase of the Federal Reserve's resistance tests

Market Overview

Global equities rebounded Friday as a turnaround in Chinese equities and a weakening of the US dollar eased pressure in Asia as investors continue to worry about the impact of the trade war on broader economic growth .

Chinese equities rebounded Friday after lows several years ago, prompted in part by news that the commission will reform some restrictions on foreign investment in domestic industries such as aviation, crop development and the banks and comments from the People's Bank of China (PBOC) that it intends to maintain "reasonably ample" liquidity in the global financial system.

However, a deeper concern remains the fate of the yuan, which is following its pace of the most brutal monthly decline against the US dollar in two and a half years. The PBOC set a higher median for the currency on Friday at 6.1666, suggesting that it does not want a disorderly decline in the summer months, but the fact that investors are dumping it so quickly, to both trade tensions and economic fundamentals. , suggests China's ambition of 6.8% GDP growth this year will be difficult to achieve.

A broader sentiment was also supported by a weaker US dollar, which fell 0.58% against a basket of six world currencies to 94.835 while the euro jumped after a framework agreement between the US and the US. European leaders to tackle the migration crisis. A rise of nearly 2% for the Shanghai Composite and an increase of 2.25% of the first-rate CSI 300 triggered the global rebound and led the regional stocks The MSCI Asia ex-Japan index rose 1.3 % at the end of the session and Japan Nikkei 225 gained 0.15% to close the week at 22,304.55 points.

equity futures should also react, with contracts linked to the Dow Jones Industrial Average showing a gain of 153 points and those related to the S & P 500 suggesting an increase of 12.9 points for benchmark Most of the 35 lenders supervised by the US Federal Reserve have passed the second phase of stress tests that will allow them to increase their dividends and buy back their shares.

European equities rebounded on last day The Stoxx Europe 600 rose by 0.56% to 378.98 points at the start of the session and the markets in Germany (+ 1.2%) and France (+ 1, 32%) were up sharply in the second quarter and first half. . The UK FTSE 100 gained 1.86% on the back of higher commodity prices.

The UK equity market returned 8.2% in sterling terms in Q2, the best index. Less impressive once adjusted to $ terms but still ahead of the global benchmark. The likely trigger? The valuation gap between UK and global stocks (13.4 vs. 15.0: 2019PE) attracted value investors. pic.twitter.com/7XU3XuMIhn

– Simon French (@shjfrench) June 29, 2018

The bond markets, however, continue to paint a more cautious image for investors, with the US Treasury The curve remains at the weakest spread between 2-year and 10-year returns since 2007.

The 10-year benchmark notes were marked at 2.86% at the beginning of London, while 2-year notes were trading at 2.528%. According to a Reuters survey, most fixed income specialists expect the curve to reverse – that is, short-term returns rise more than returns in the first quarter. long term – from here one to two years. A reversed yield curve is one of the key market signals for the recession in the world's largest economy.

World oil prices, however, do not appear to reflect fears of a slowdown, as crude continues to advance towards 2014 in recent days, due to slower production of some members of the US. OPEC, sanctions against Iran and supply disruptions from Canada

77.59 dollars a barrel, while WTI contracts for the month of August, which are more closely related to gas prices in the United States, fell 19 cents to 73.28 dollars per barrel.