Global shares fell today after weaker-than-expected economic surveys fuelled investor concerns over the escalating US-China trade war and its effects on the world economy. 

Less than two weeks after ECB President Mario Draghi pledged indefinite stimulus to help recover the bloc’s ailing economy, there appears to be no end to the current slowdown. Another bleak round of business surveys from the eurozone’s biggest economies came in weaker than expected.

Following the release of German PMI data, the euro fell 0.4% to $1.0966, its lowest in over a week against the dollar. 

Germany’s DAX hit its lowest level in nearly two weeks, falling 1.5%. The MSCI All Country World Index showed shares across 47 countries down 0.25%. 

Elsewhere, oil gained more than 1% as Middle East tensions remained elevated and oil prices rose on doubts on how fast Saudi Arabia can restore full crude output.

As investors waited for reasoning on US-China trade talks, most Asian share markets fell. Market sentiment remained fragile, as concerns continued that a trade deal between the countries could be delayed even more.

According to a statement released by the US Trade Representative’s office over the weekend, the two days of talks with China were deemed as “productive”. A principal-level trade meeting in Washington is still scheduled for October.

The talks were described as “constructive”, according to China’s Commerce Ministry, and “detailed arrangements” were discussed for the meeting.

In response to requests from US companies, the US removed tariffs from more than 400 Chinese products.

However, despite the positive sentiment, markets remain fragile and unconvinced about any near-future resolution.

Michael McCarthy, a Sydney-based strategist at CMC Markets, said:

There are real concerns about the impact on economies from the trade dispute. People are probably getting an idea that this will be a long negotiation. And the longer it lingers the more impact it will have economically.

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Dalia Hilmi
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