Reuters :
Asian shares sank on Monday as the latest salvo in the Sino-US trade war shook confidence in the world economy and sent investors steaming to the safe harbors of sovereign bonds and gold, while slugging emerging market currencies.
Yields on benchmark 10-year Treasury debt dropped to their lowest since mid-2016, while gold hit its highest since April 2013 as risk was shunned.
There was some relief that China fixed the yuan’s midpoint at a relatively steady 7.0570 per dollar when it had been trading as weak as 7.1850 offshore, countering concerns Beijing would let the currency slide to keep exports competitive.
MSCI’s broadest index of Asia-Pacific shares outside Japan still shed 2.0%, and Australia 1.5%.
Japan’s Nikkei lost 2.3%, while Shanghai blue chips fell 1.2%. E-Mini futures for the S&P 500 eased 0.8%, and EUROSTOXX 50 futures 1.1%.
Wall Street nose-dived on Friday when President Donald Trump announced a 5% additional duty on $550 billion in targeted Chinese goods, hours after China unveiled retaliatory tariffs on $75 billion worth of US products.
At the G7 meeting in France over the weekend, Trump caused some confusion by indicating he may have had second thoughts on the tariffs.
But the White House said on Sunday that Trump wished he had raised tariffs on Chinese goods even higher last week, even as he signaled he did not plan to follow through with a demand that US firms close operations in China.
Trump is now set to hold a joint news conference with French President Emmanuel Macron later on Monday.
“There is an uneasy feeling that the very fragile negotiations are spiraling out of control,” wrote analysts at ANZ in a note.
“The escalation suggests uncertainty will continue to weigh on global trade, industrial production and investment, with no sign of a resolution.”
Asian shares sank on Monday as the latest salvo in the Sino-US trade war shook confidence in the world economy and sent investors steaming to the safe harbors of sovereign bonds and gold, while slugging emerging market currencies.
Yields on benchmark 10-year Treasury debt dropped to their lowest since mid-2016, while gold hit its highest since April 2013 as risk was shunned.
There was some relief that China fixed the yuan’s midpoint at a relatively steady 7.0570 per dollar when it had been trading as weak as 7.1850 offshore, countering concerns Beijing would let the currency slide to keep exports competitive.
MSCI’s broadest index of Asia-Pacific shares outside Japan still shed 2.0%, and Australia 1.5%.
Japan’s Nikkei lost 2.3%, while Shanghai blue chips fell 1.2%. E-Mini futures for the S&P 500 eased 0.8%, and EUROSTOXX 50 futures 1.1%.
Wall Street nose-dived on Friday when President Donald Trump announced a 5% additional duty on $550 billion in targeted Chinese goods, hours after China unveiled retaliatory tariffs on $75 billion worth of US products.
At the G7 meeting in France over the weekend, Trump caused some confusion by indicating he may have had second thoughts on the tariffs.
But the White House said on Sunday that Trump wished he had raised tariffs on Chinese goods even higher last week, even as he signaled he did not plan to follow through with a demand that US firms close operations in China.
Trump is now set to hold a joint news conference with French President Emmanuel Macron later on Monday.
“There is an uneasy feeling that the very fragile negotiations are spiraling out of control,” wrote analysts at ANZ in a note.
“The escalation suggests uncertainty will continue to weigh on global trade, industrial production and investment, with no sign of a resolution.”
