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© Reuters. FILE PHOTO: A man on a bicycle stops in front of an electronic board showing the Nikkei stock index in front of a brokerage in Tokyo
By Wayne Cole and Tomo Uetake
SYDNEY (Reuters) – US equity futures tumbled and Asian stocks slid early on Monday amid growing uncertainty over whether the US and China could reach an agreement to their trade war after the sharp rise in tariffs by Washington.
E-Mini futures for the shed 1.1%.
The MSCI's broadest index of Asia-Pacific shares out of Japan fell 0.2%, approaching its lowest level in two months on Thursday.
Japan's average fell to 1.0% to its lowest level since March 28th. It was last traded down by 0.6%.
The yield on 10-year US Treasury bonds dropped to 2.437%, partly as a safe haven but also, according to the assumptions, a trade war would darken the global growth and thus allow the big central banks to remain accommodative.
The United States and China are deadlocked on Sunday over trade talks while Washington has asked for concrete changes to Chinese law and Beijing has declared that it will not engulf any "fruit" bitter "harmful to his interests.
President Donald Trump tweeted Sunday night that the United States was right "if we wanted to be with China," adding that Beijing "had broken the deal with us" and then tried to renegotiate.
The trade war between the two major world economies intensified on Friday. The United States has increased tariffs on Chinese goods worth $ 200 billion. China has promised to take revenge, without giving details.
White House economic adviser Larry Kudlow told a Fox News broadcast that China must accept "very strict" implementation provisions for a possible deal and said the point of view is that it will be a good idea. stumbling was Beijing's reluctance to adopt the agreed legislative changes. Kudlow said US tariffs would remain in place as negotiations continue.
Beijing has remained provocative.
"Discussions are under way, but our basic argument is to limit China's progress and retaliation.We see a significant risk that all Chinese imports will be subject to tariffs in the coming months," he said. Michael Hanson, Head of Global Macroeconomic Strategy. at TD Securities.
"The market reaction will ultimately depend on the fact that China and the United States continue to negotiate, that the remaining US $ 325 billion of US imports from China will also be tariffed, in the same way that China will retaliate. and what will happen to the rights of the automobile. "
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 other major currencies were relatively calm, the yen refuge being still supported, but not aggressively. The dollar held steady at 109.72 yen, down 0.2% on the day and just above the 14-week low of 109.46.
The euro remained stable at 1.1235 USD, while the dollar was slightly lower than that of a basket of currencies at 97.295.
The offshore fell to its lowest level in over four months at 6.88 percent. The last drop was 0.5% to 6.878 per dollar.
In commodity markets, it's firmed up 0.2% to $ 1,287.81 per ounce.
Oil prices have fallen, along with general aversion to risk aversion. was down 0.5% to 61.33 dollars a barrel, while futures contracts fell 0.2% to 70.49 dollars. [O/R]
(This story adds a forgotten word in the title.)
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