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GLOBAL MARKETS-Stocks and oil fall, yen rallies as Trump threatens to further escalate China trade war 2 New York

Oil prices fell after China's retaliatory tariffs announcement highlighted concern the trade dispute between the world's two largest economies could slow global growth or even trigger a recession.

U.S. crude fell 2.17% to $54.15 per barrel and Brent was last at $59.33, down 0.98% on the day.

Trump's comments came after Federal Reserve Chair Jerome Powell said the U.S. central bank will "act as appropriate" to keep the economic expansion on track, but noted rising risks.

Powell's remarks had somewhat given markets relief after the overnight announcement from Beijing. Trump's tweeted response to the speech labeled Powell an "enemy."

The two-year/10-year yield curve inverted last week for the first time since 2007, a signal that a U.S. recession is likely in one to two years. The curve has traded in and out of inversion over the past three days.

U.S. Treasury yields fell, with 10-year notes last up 25/32 in price to yield 1.5266%, from 1.61% late on Thursday.

The two-year/10-year yield curve tripped to negative territory early in the session and for a third consecutive day.

The U.S. dollar fell after Powell's comments and dropped further after Trump's tweets.

The dollar index fell 0.54%, with the euro up 0.6% to $1.1145.

The Japanese yen strengthened 1.06% versus the greenback at 105.33 per dollar, while sterling was last trading at $1.2286, up 0.29% on the day.

Spot gold added 2.0% to $1,528.05 an ounce.

Source: Saudi Press Agency

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