American Treasury Secretary Steven Mnuchin said on Sunday that the United States’ trade war with China is “on hold”, calming investors’ worries about a trade war and sending stocks, as well as oil prices, higher.

“We are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework,” Mnuchin said in a television interview on the Fox News television station.

Global markets

Asian shares rallied on Mnuchin’s comments. 

MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.55 percent in early trade, led by strong gains in greater China. Hong Kong's Hang Seng was up 1.0 percent, Taiwanese shares 1.1 percent and mainland shares 0.4 percent.

“The weekend talk appears to have made progress. While they still need to work out details of a wider trade deal, it is positive for markets that they struck a truce,” Hirokazu Kabeya, chief global strategist at Daiwa Securities, told Reuters.

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Commentary: Investors worldwide will be awaiting this week’s U.S. data for more clarity on economic outlook

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Middle East markets

Middle East stock markets traded mostly in narrow ranges on Sunday due to a lack of triggers and low traded volumes across the region.

Dubai’s index added 0.2 percent. Drake and Scull International was the highlight of the session, grabbing most volumes and rising 2 percent after it reported last week a net profit attributable to shareholders of 16.2 million dirhams ($4.4 million) for the first quarter, swinging from a net loss of 722.5 million dirhams in the corresponding period last year.

Damac Properties rose 0.88 percent and Emaar Properties added 0.2 percent. 

Both Damac Properties and Emaar Properties appear to be oversold, according to the Relative Strength Index (RSI 14). The index is a measurement between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30. Damac and Emaar both have an RSI of 17.33 and 28.57 respectively, according to data from Thomson Reuters Eikon.

Neighbouring Abu Dhabi’s index lost 0.1 percent. 

The Saudi index was little changed. Real estate developer Jabal Omar Development was among the best performers, up 3.9 percent at the close – and it had been up more than 6 percent in earlier trading – after announcing an agreement with Albilad Capital to sell 90 housing units for 1.1 billion riyals ($293 million).

Qatar’s index lost 0.4 percent, Egypt’s index dropped 0.6 percent, Bahrain’s index dropped 0.4 percent, while Oman’s index went down 0.6 percent and Kuwait’s index edged up 0.1 percent. 

Oil prices

Oil prices were trading higher on Monday, boosted by U.S. Treasury Secretary’s comments on Sunday.

Brent crude futures were at $79.13 per barrel at 0121 GMT, up 62 cents, or 0.8 percent, from their last close. Brent broke through $80 for the first time since November 2014 last week.

U.S. West Texas Intermediate (WTI) crude futures were at $71.83 a barrel, up 55 cents, or 0.8 percent, from their last settlement.

Currencies

The dollar edged up against a basket of major currencies early on Monday, boosted by higher U.S. yields.

The dollar rose 0.20 percent against the yen to reach 110.97 yen, close to Friday's four-month high of 111.085.

Precious metals

Gold prices retreated early on Monday on a stronger dollar and as demand for risky assets rose after investors saw comments from the U.S. Treasury Secretary as reassuring.

Spot gold was down 0.2 percent at $1,289 per ounce at 0325 GMT.

U.S. gold futures for June delivery were 0.2 percent lower at $1,288.20 per ounce.

(Writing Gerard Aoun; Editing by Shane McGinley)

(gerard.aoun@thomsonreuters.com)

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