World stocks near lowest in two months, but equities show signs of stability

Global stocks declined to levels near their two-month lows this Tuesday, following a week of trade uncertainties.

However, the new week has seen both the U.S. and China offer somewhat optimistic comments on trade talks. That has seen the equities market ease up from Monday’s sell-off, which was the worst the market had seen in 2019.

Despite the clearly upbeat tone in the market, Asian shares tumbled on Tuesday morning, before a slight upside saw them close off the day’s lows.

Chinese shares experienced a selloff, dragging down the rest of the market as Japan’s Nikkei slid to its lowest index since February.

Noticeably, MSCI’s broadest index of shares in the Asia-Pacific markets fell more than 1% and hit its lowest index since its Jan 30 low. The move left MSCI’s global equity index trapped near the gauge’s two-month lows.

Other than that, there have been signs that the market could be stabilizing. This has, for the moment, meant that safe-haven assets are not so hot.

For instance, yields on Germany’s 10-year government bonds returned 2 basis points (bp) higher but still at minus 0.06%. It improved on its six-week lows reached on Monday after investors swamped safe havens as trade tensions moved a notch higher.

In the U.S., the government’s 10-year Treasury yields moved up after its yield curve had inverted once gain on Monday- the second time it had done so in under a week.

Elsewhere, the Japanese yen that is a traders’ safe-haven lost some shine as sentiment improved and the dollar strengthened with a 0.4% gain to trade at 109.74 to the yen.

The single currency (euro) showed signs of steadying up even as European markets looked to follow suit. The EUR/USD improved 0.12% to remain $1.1235 to the dollar.

China’s yuan shored up slightly, touching 6.8731 to the dollar after hitting its lowest level in four months on Monday. The world markets could be stabilizing, but uncertainty remains as China announced it is ready to impose its own tariffs on U.S. imports worth $60 billion. This is in retaliation to the tariff hikes the United States imposed late last week on Chinese goods worth $200 billion.