LONDON (Reuters) - World stocks steadied near three-week lows on Wednesday and Chinese markets bounced after recent sharp falls as expectations grew that policy stimulus by Beijing could temper some of the impact from an escalating Sino-U.S. trade conflict.
The dollar too eased off 11-month highs against a currency basket .DXY, Wall Street looked set for a stronger opening and MSCI’s all-country equity index snapped a five-day run of losses, rising 0.3 percent .MIWD00000PUS.
Its rebound was fueled by a bounce of almost one percent in MSCI's non-Japan Asian shares off 6-1/2-month lows .MIAPJ0000PUS, following gains in Hong Kong, Seoul and mainland Chinese indexes .HSI .KS11 CSI300.
Assets perceived to be safe, such as the yen, Swiss franc and the government bonds of Germany and the United States, took a step back after hefty recent rallies.
“I suspect safe-havens such as Bunds and Treasuries could be put to the test as risk sentiment shows signs of stabilizing,” Commerzbank strategist Rainer Guntermann said.
One catalyst appeared to be a paper from China’s central bank which suggested cutting banks’ reserve requirement ratios (RRR), which would boost market liquidity and loosen monetary conditions. Analysts said an RRR cut appeared now to be a matter of time.
The central bank also fixed the yuan's exchange rate a touch higher against the dollar, after the currency posted its biggest daily loss in 1-1/2 years CNY=.
However, worries of a fully fledged trade war between
