Stock markets rose yesterday extending a Wall Street rally sparked by dovish Federal Reserve statements, while oil prices fell dramatically due to an unexpected jump in US inventories.
A day after surging by two per cent, Wall Street's main exchanges pushed higher in midday trading, despite new US payrolls data showing that hiring crashed last month.
The US rally on Tuesday came after Federal Reserve chief Jerome Powell opened the door to a potential interest rate cut, saying ongoing trade conflicts had dimmed the growth outlook and the Fed would be watchful as a result.
In commodities, the price of a barrel of Brent crude oil fell more than three dollars to below the $60 mark for the first time in four months, while the benchmark WTI crude lost more than two dollars.
The price drops came after a report by the US Energy Information Administration reporting that the country's crude stockpiles had increased by more than expected.
Europe's main stock markets also ticked upwards, with London's benchmark FTSE 100 and Frankfurt's DAX 30 index both up 0.1 per cent while the Paris CAC 40 0.4 per cent higher.
Buying was supported also by more favourable news on the trade front, with Beijing backing negotiations to resolve its stand-off with Washington and congressional Republicans opposing President Donald Trump's tariff threats against Mexico.
However International Monetary Fund chief Christine Lagarde issued a warning about the state of the global economy, saying that the”"immediate priority” of this weekend's G20 meeting was “current trade tensions”.
She also said the tit-for-tat tariffs between the US and China had put the brakes on growth in both countries and cut a few points off global growth.
The IMF also lowered China's economic growth forecast for 2019 and 2020, citing “uncertainty” over the US-China trade war.
And a World Bank report showing reduced global growth forecasts for the year suggested that investors could expect trade headwinds to continue for some time yet.
The world economy is expected to expand by 2.6 per cent this year, three tenths of a percentage point lower than the January forecast, and well below the three per cent growth of 2018, according to the Global Economic Prospects report.
The US-China trade spat has seen the world's top two economies deploy retaliatory tariffs on trade worth hundreds of billions of dollars, with no date set for stalled talks to resume.
But there are hopes that Trump and Chinese President Xi Jinping will meet at the G20 summit in Japan this month to jump-start negotiations.