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World Stocks Begin 2020 With Shot of Chinese Stimulus

World stock markets started the new year with a shot of Chinese provocation, ensuring there was no quick hangover after the gains of 2019.

China’s central bank said overnight it was lowering how much cash banks had been required to hold, the eighth reduction for the last two years. The move that ought to free around 800 billion yuan ($115 billion) to boost its financial system.

Also, U.S. President Donald Trump tweeted that a long-awaited Phase 1 trade agreement with Beijing would be signed on January 15.

Europe’s main markets gained 0.4% to 0.8%, following Asia higher in their first trading session of the new decade. U.S. futures suggested similar gains on Wall Street, with S&P 500 e-minis up 0.4%.

MSCI’s broadest index of world shares included 0.2% to December’s 3.3% leap and 24% gain in 2019.

Some gloomy eurozone manufacturing PMI data had been revised higher, which pushed up inflation expectations and noticed Germany’s 15-year bond yield briefly turn positive for the first time since July.

In currency markets, the greenback rose against significant peers; however, the gains have been capped amid expectations of a better scope for global progress and trade and an end to U.S. economic outperformance.

The greenback was 0.1% stronger versus the yen at 108.81. The euro fell 0.02% to 1.1208.

After the stimulus in Beijing, China’s yuan ended at 6.9631, its strongest finish versus the greenback since August 2.

China’s blue-chip index, one of the world’s greatest performers in 2019, rose 1.4%, reaching its highest since February 7, 2018.

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