Asian shares fall as doubts over US-China truce emerge

Asian shares fall as lift from U.S.-China trade truce ends

Asian shares fall as lift from U.S.-China trade truce ends

Trump agreed to postpone new tariffs on Chinese imports by 90 days and Xi said China would purchase "a not yet agreed upon, but very substantial" amount of USA goods and label Fentanyl a controlled substance.

Trump agreed to hold off on plans to raise tariffs after China agreed to swiftly purchase a very significant amount of American goods, including agricultural, energy, industrial, and other products, to reduce the USA trade deficit to China. It added $2.02 to settle at $52.95 a barrel on Monday. The curve between USA three-year and five-year and between two-year and five-year debt inverted on Monday - the first parts of the Treasury yield curve to invert since the financial crisis, excluding very short-dated debt.

This includes tariffs on US auto imports, which China raised from 10 to 40 per cent in July.

Analysts expect the two-year, 10-year yield curve - seen as a predictor of a USA recession - to follow suit.

The Australian dollar benefited from the broad-based dollar selling, gaining 0.3 percent in Asian trade at $0.7384.

That put the spread between 10-year and two-year Treasuries at less than 14 basis points, its flattest level since July 2007.

"Now, even recessionary fear is starting to raise its ugly head". USA light crude was up $1 at $53.95 after earlier gaining more than 3 percent to an intraday high of $54.55.

Price gains of more than two dollars a barrel were pared back after Qatar said it would leave OPEC next year as it looks to concentrate on its gas production, though it would continue to pump crude.

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The House of Commons leader, Andrea Leadsom, also told parliament the vote would go ahead on December 11. She said those backing a second referendum wanted the public to give a different message.

Emerging market currencies, which have suffered in recent months amid increased trade-related tensions, advanced and MSCI's index for emerging currencies.MIEM00000CUS was up 0.6 percent. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.6 percent.

All of the currencies in the APAC region are trending higher against the Dollar, with the exception of the Indian Rupee that has declined 0.6% at a time of writing as a result of local data missing expectations. Lawmakers are to vote December 11 on Prime Minister Theresa May's agreement on leaving the European Union.

The New Zealand dollar NZD= gained 0.6 percent, while the USA dollar lost 0.6 percent against the Canadian dollar CAD=. The euro rose to $1.1372 from $1.1353. It firmed 0.8 percent on the safe-haven yen to 83.70.

Sterling gave up early gains and dived to its lowest since the end of October as investors dumped the currency on growing concerns about British parliamentary approval for a Brexit deal.

But the hearing is expected to be postponed to Thursday because major exchanges will be closed on Wednesday in honour of former U.S. President George H.W. Bush, who died on Saturday at the age of 94.

"The market pricing evident in the yield curve inversion from three to five segment of the curve, as well as the dip in the 10-year yield below 3 per cent yesterday, goes to reinforce these concerns" about the USA economy potentially heading into a recession, said Prakash Sakpal, an economist at ING in Singapore.

The dollar originally came under pressure last week on Powell's comments that rates were nearing neutral levels, which markets interpreted as signaling a slowdown in the Fed's rate-hike cycle. One of the company's suppliers, Cirrus Logic, trimmed its revenue outlook, more evidence that the latest iPhones are not selling well. It edged $2.23 higher to $61.69 a barrel in London.

Among the precious metals, spot gold rose as dollar weakened, trading up 0.5 percent at $1,237.24 per ounce.

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