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CCTV Script 02/08/19

— This is the script of CNBC's news report for China's CCTV on August 2, 2019, Friday.

US financial market was choppy and volatile again overnight after experiencing volatility because of Powell's speech, 3 US stock indexed declined, losing all gains in the morning session and closing down. Till the closing session, DJIA eased more than 280 points.

Generally, VIX, jumped more than 10 percent, and gold, the safe-haven asset, followed suit, closing up nearly 1.3 percent at $1,450.70 an ounce. Oil prices, particularly sensitive to economic developments, had a black day, with US WTI crude down 7.9 per cent to $53.95 a barrel, the biggest one-day fall in four years. Brent prices also suffered, closing down 6 per cent at $60.67 a barrel.

It was the worst performance since February 2016. The immediate cause of the upheaval in financial markets is that trade tensions and slowing growth have dimmed the outlook for the world economy. On the one hand, the Eurozone economy is caught between a prolonged contraction in manufacturing and persistently low inflation.

The latest economic data from the euro zone show the region's manufacturing sector has contracted for a sixth straight month. Germany, in particular, has suffered most, with its manufacturing sector in its worst recession in seven years. In recent days, the European central bank, Draghi, has warned that the euro zone's economic outlook is getting worse because of a slump in manufacturing.

Mario Draghi, ECB President

This outlook is getting worse and worse, and it is getting worse and worse in manufacturing especially

Meanwhile, the situation in the United States is not encouraging. Although major economic indicators have not been worse than expected, they are still far from healthy economic growth. The UK economy has also been dragged down by the Brexit, with the bank of England just announcing a cut in its growth forecast.

In addition to Brexit, the world economy is also facing multiple pressures such as trade tensions and weaker expansion. Since the beginning of this year, the IMF has lowered its global economic growth forecast for this year and next for three consecutive times in its world economic outlook report.

Led by the Federal Reserve, central Banks around the world have entered a new round of interest rate cuts. But some market analysts say it may be hard to calm markets even if the fed cuts rates again, if trade frictions triggered by the US are not resolved properly. If Trump is not re-elected, the next President will be left with a market mess.

Mark Mobius, co-founder of Mobius Capital Partners

"I think the markets then will go haywire because they've been depending on Trump policies to keep on pushing the market up and also higher growth rate in the U.S."

The volatility in U.S. financial markets were already a significant drag on Asia-pacific stocks after the market opened on Friday. It now appears that the turmoil could last until the end of trading this week. Further developments remain to be seen.