Asian equities and the yuan down while the United States and China are in the deadlock of trade negotiations

SYDNEY (Reuters) – US equity futures tumbled and Asian equities fell on Monday amid growing uncertainty over the ability of the US and China to reach an agreement to end their deal. growing commercial war.

The United States and China are stalled over trade talks on Sunday as Washington has called for concrete changes to Chinese law and Beijing has declared that it will "swallow none" bitter fruit "that would be detrimental to his interests.

E-Mini futures for the S & P 500 lost 1.0%.

The broadest MSCI index of Asia-Pacific equities outside Japan dropped 0.4%, approaching its two-month low on Thursday.

Chinese equities fell, with the Shanghai Composite benchmark and the first-class CSI 300 losing 1.4% and 1.6% respectively, while Hong Kong's financial markets were closed on a holiday.

Japan's Nikkei average fell nearly 1.0% to its lowest level since March 28th. It was trading for the last time down 0.5%.

The benchmark 10-year US Treasury yield declined slightly to 2.441%, partly as a safe haven, but also because we thought the escalation of the war would put more pressure on global growth and thus allow large central banks to remain accommodative.

President Donald Trump tweeted Sunday night that the United States was "exactly where we want to be with China," adding that Beijing had "broken the deal with us" and then tried to renegotiate.

The trade war between the world's two major economies intensified on Friday as the United States raised tariffs on Chinese goods worth $ 200 billion after Trump said Beijing had "broken the deal." "by giving up on previous commitments. China has promised to take revenge, without giving details.

White House economic adviser Larry Kudlow told a Fox News program that China must accept "very strict" implementation provisions for a possible deal. Kudlow said US tariffs would remain in place as negotiations continue.

Beijing has remained provocative.

"Discussions are ongoing, but we advocate limited progress and retaliation by the Chinese. We see a significant risk that all imports from China will be subject to tariffs in the coming months, "said Michael Hanson, Head of Global Macro Strategy at TD Securities.

"Market reaction will ultimately depend on continued negotiations between China and the United States, tariffs of US $ 325 billion from US imports from China, the way China responds and the consequences for human rights. automotive customs (section) 232 ".

Under this scenario, the renminbi is expected to be between 5% and 6% against the US dollar over the next three months, said Hanson, dampening the economic impact of rising tariffs.

The Chinese yuan off the coast fell to its lowest level in more than four months at 6.88 dollars a dollar. The last drop was 0.4% to 6.872 per dollar.

The other major currencies were relatively calm, the yen refuge being still supported, but not aggressively. The dollar held steady at 109.74 yen, down 0.2% on the day and just above the 14-week low of 109.46.

The euro remained stable at 1.1233 USD, while the dollar was little changed compared to a basket of currencies at 97.296.

"If trade negotiations between the US and China do not progress in the coming weeks, Asian currencies will be under new pressure," said Khoon Goh, head of Asian research at ANZ Research, adding that his team did not expect the yuan will break the psychological threshold of 7 to a dollar.

"We hope everything will be fine, but our basic scenario now is that the United States and China will not reach an agreement, which means that tariffs will be increased on the rest of China's exports to the United States. United States."

In commodities markets, oil prices have fallen, in line with general aversion to risk aversion. US crude fell 0.1% to $ 61.54 per barrel, while Brent crude futures remained stable at $ 70.65.

Spot gold was up 0.1% at $ 1,286.59 per ounce.

In contrast, digital currencies maintained most of their significant gains over the weekend.

Bitcoin surged more than 10% on Saturday and reached its highest level in nine months at $ 7,585.00 on Sunday, before reducing gains. The last quote at $ 7041.05, up 1.0% on the day.

GRAPHIC: Asian Stock Exchanges – tmsnrt.rs/2zpUAr4