In early European trade, the pan-region Euro Stoxx 50 futures were up 0.25per cent, German DAX futures rose 0.24per cent while Britain’s FTSE futures were down 0.3per cent.
Trump said on Monday that Chinese officials had contacted their US trade counterparts and offered to resume negotiations, an assertion that China declined to confirm.
His comments helped temper sharp losses in global markets after both sides announced new tariffs on Friday, in the latest escalation in the protracted trade dispute.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3per cent after dropping 1.3per cent the previous day.
Japan’s Nikkei rose 1per cent.
The Shanghai Composite Index rallied 1.5per cent, with an additional boost from data showing China’s industrial firms returned to profit in July. South Korea’s KOSPI added 0.4per cent.
Equity markets may have found better footing for now but the longer-term outlook for riskier assets, buffeted repeatedly by trade concerns, remained shaky.
“There is still a large element of uncertainty regarding the US-China trade dispute. It remains difficult to foresee a resolution, and this will continue to weigh on equity market sentiment,” said Shusuke Yamada, chief Japan FX and equity strategist at Bank Of America Merrill Lynch.
“Apart from the trade war, the equity markets also have to keep an eye on Brexit proceedings, monetary policy of key players such as the European Central Bank and moves in the Chinese yuan.”
China’s onshore yuan nudged down to a fresh 11-year low of 7.1649 per dollar.
China has allowed the tightly-managed yuan to slide roughly 4per cent so far this month as trade tensions with the United States worsened. This has triggered fears of a global currency war, in which countries try to weaken their currencies in an attempt to soften the blows of a broader economic slowdown.
“It is clear that the trade conflict between the United States and China is getting ever more serious. The two may still opt to negotiate, but prospects for a quick resolution have diminished greatly as neither side can back down,” said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities.
“The trade conflict only increases the torment on the global economy.” The dollar held gains made the previous day helped by a rebound in US Treasury yields.
The dollar index versus a basket of six major currencies stood at 98.012, having risen about 0.5per cent overnight.
The benchmark 10-year US Treasury yield was at 1.523per cent, pulled back from a three-year low of 1.443per cent reached on Monday on the back of wide-spread risk aversion. The Japanese 10-year government bond yield was up 2 basis points at minus 0.260per cent after plumbing minus 0.285per cent on Monday, its lowest since July 2016.
The greenback traded at 105.685 yen following a 0.7per cent gain on Monday, when it had brushed an eight-month low of 104.460.
The euro was flat at US$1.1100 after losing 0.4per cent on Monday.
The Australian dollar, sensitive to developments in China, Australia’s largest trading partner, dipped 0.25per cent to US$0.6758, handing back most of Monday’s gains.
Crude oil prices recovered some ground as the broader markets stabilized, trimming some of their significant losses the previous day on the prospect of crude from Iran, currently facing sanctions, hitting the market.
Brent crude futures were up 0.53per cent at US$59.01 per barrel after losing 1per cent the previous day. US crude rose 0.62per cent to US$53.97 per barrel.
Oil prices fell on Monday after French President Emmanuel Macron said preparations were underway for a meeting between Iranian President Hassan Rouhani and President Trump in the coming weeks to find a solution to a nuclear standoff.
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