Asian equities fall to their lowest level in six weeks as time is running out for higher US tariff on Chinese products

SYDNEY (Reuters) – Asian stocks fell to their lowest level in six weeks on Thursday, as tensions mounted before the latest trade talks between the US and China, which could radically change the direction of the talks. Mondial economy.

Investors were on their guard as they waited to see if Chinese Vice Premier Liu He could save a trade deal during two days of talks in Washington on Thursday and Friday, after US officials said Beijing had renounced its previous commitments.

An agreement could avoid a sharp increase in US tariffs on Chinese products that President Donald Trump threatened to impose on Friday, which Beijing has threatened to retaliate against as part of a major escalation in the trade war murderous country.

"If Trump's threat becomes reality, it will change the game for the global economy. This is the worst case scenario we've modeled last year, which has led to recessionary conditions in the United States, a rapid reduction in growth in China, and slower global trade, "said Steve Cochrane, an economist in the US. Chief at Moody's Analytics in Singapore.

The broadest MSCI Asia-Pacific equity index out of Japan fell 1% to its lowest level since March 28th.

The shares extended their past losses in Asian trade after US President Donald Trump told a rally of supporters that China had "broken the deal" and paid the price.

Chinese stocks tumbled again and were at a low of 2 and a half months on Wednesday. The Shanghai Composite benchmark slipped 1.1% and the CSI 300 index of 1.5%. Hong Kong Hang Seng lost 1.6%.

Japan's Nikkei average dropped 1.2% to its lowest level in five weeks, while South Korea's KOSPI fell 1.1% and the Australian benchmark 0.4%.

Trump has threatened to raise tariffs to 25% from 10% on 200 billion dollars of Chinese imports at 12:01 pm ET (0401GMT) on Friday. Beijing is committed to retaliate without giving details.

Kazuhiko Fuji, senior researcher at RIETI, a think tank affiliated with the Japanese government, said the talks seemed fragile.

"I suspect the United States will just throw an ultimatum to China. It is not surprising that the US yield curve is almost reversed again, "he said.

The yield spread between 3-month bills and 10-year notes has narrowed to 3 basis points from around 15 points a few weeks ago.

The tightly watched spread turned negative at the end of March, scary investors, who believe that this development suggests a future recession.

The 10-year Treasury benchmark rate was 2.446%, after hitting a two-week low of 2.426% on Wednesday.

Wall Street shares ended a staccato session to drop overnight, as the Dow Jones Industrial Average edged higher, with the S & P 500 and Nasdaq Composite losing 0.2% and 0%, respectively. , 3%.

On the foreign exchange market, the pound has weakened, suggesting that the Brexit talks between the British government and the main opposition party may soon collapse.

The pound fell below the psychologically key level of $ 1.30, reaching a minimum of six days in a day and trading at $ 1.301.

The dollar index against a basket of six large peers was stable at 97.619, the other major currencies being also confined to busy ranges. The euro was little changed at $ 1.188 and the Japanese yen rose 0.2% against the greenback to settle at 109.93 yen.

In the commodities market, oil prices fell on Thursday because of worries over the intensification of the Canada-US trade battle, despite an unexpected drop in US crude inventories.

Brent crude futures fell 0.9% to $ 69.75 per barrel, while US crude West Texas Intermediate (WTI) fell 0.9% to $ 61.58 a barrel.

Shanghai's industrial metals fell early Thursday, as benchmark copper in London hit its all-time low in nearly three months, as investors sought security ahead of trade talks.