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CCTV Script 03/08/17

— This is the script of CNBC's news report for China's CCTV on August 3, Thursday.

Let's take a look at how financial markets reacted when Trump signed the sanctions bill. Firstly, oil prices rose. Overnight, international Brent oil prices were up by 1.2% while the WTI rose by 0.9%. The demand of US gasoline had also increase significantly, supporting the rise in oil prices. Apart from that, the market is also concerned whether Russian energy companies would be further affected should U.S. continues to impose further economic sanctions against Russia.

At present, according to Russian oil data, Russia's oil production, in July, was at 10.95million barrels, unchanged for three months, to fulfill its pledge to curb production. However, if this new round of sanctions were to negatively impact the Russian energy companies, making it challenging for them to finance their businesses, it is very likely that Russian energy companies will face closure, resulting the overall Russian oil production to fall.

This new sanctions bill will see more economic repercussions on Russia companies and individuals, including the Russian energy industry, military companies, banks, and last but not least, the agencies accused of meddling in the U.S. elections last year. Furthermore, overnight, the exchange rate, with the dollar against the ruble, soared. In other words, the ruble depreciated.

Yet, the U.S stock market was not too affected by the sanctions. In fact, overnight, the DJIA closed at a new high, at 22,000 points. A market analyst revealed to CNBC that he was surprised by the calmness of the market, believing that the market had underestimated the potential risks.

[Steve Quirk, EVP, Trader Group, TD Ameritrade] "One of the things thats most surprising to me about this rally is the fact that we just, as a market, just sort of placed these things to the side and not really given them, what I would say, their proper accreditation for risk in the portfolio."

We have seen how the Russian Prime Minister calling the sanctions tantamount to a full scale trade war. Up next, the EU's reactions will be crucial. This is because many European countries are on close terms with the Russia's energy sector, which has become America's main target.

For example, many German energy companies are working together with Russia in many energy pipeline projects. The sanctions against Russia would then cause multiple countries in the EU to suffer economic losses. As such, EU previously expressed their dissatisfaction with the United States on these unilateral sanctions against Russia, and clearly warned that if energy companies in Europe are affected, EU will take appropriate retaliation measures against the U.S.

Following this, how would Russia take revenge on America? How would these unilateral sanctions against Russia affect European enterprises and how would EU respond to the United States? All of these questions are closely related to each other. We will continue to keep watch.

CNBC's Qian Chen reporting from Singapore.

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