© Reuters. One is sitting in front of an electronic board that shows stock information at a Hangzhou brokerage By…
By Andrew Galbraith
SHANGHAI (Reuters) – Asian shares fell on Tuesday as a relief gathered by rising doubts about China and China The United States will be able to solve trade differences.
An inverted US return curve also caused concern about a possible recession.
MSCI’s broadest Asia Pacific Asia-Pacific index outside Japan fell 0.3 percent when the Chinese stock markets struggled to move away from negative territory.
Chinese blue chip shares in Shenzhen and Shanghai were slightly weaker and the benchmark index barely crossed. Shares in Hong Kong lost 0.3 percent.
Australia shares gave 0.8 percent and Seoul-Kospi dropped 0.6 percent while Japan’s stock index was 1
.3 percent lower.
The temporary freezing of additional hostages in the US-China trade war had been a global rally on stock markets on Monday, which pushed the world-wide world index of MSCI by 1.3 percent.
However, even before the trading day ended, major US indices returned from intraday highs, as investors were thinking about unresolved issues between two countries.
Overnight stay, it closed 1.13 percent higher, it rose 1.09 percent and it increased 1.51 percent.
“Total trading news overnight (probably) has left the market with more questions than answers, can the US and China really solve their 90-day differences?” National Bank analysts of Australia said in a note to customers.
“It seems that more details and signs of progress will be needed if the warm fuzzy feel of the initial trade weapon style is maintained.”
There was confusion already when the 90-day period began. White House official said it began on December 1. Earlier, White House’s economic adviser Larry Kudlow told reporters that it should begin on January 1.
In addition, none of the commitments US officials had given of China, including reducing their 40 percent tax on cars, agreed to write and specific had not yet been hammered.
“The fear of global markets is that this is just a short-term relief rally and we’ll be back where we were a few weeks ago, staring down the barrel of long-term global growth slow down,” said Nick Twidale, the southeast-based analyst at Rakuten Securities Australia in a listing.
“In the short term, it seems that we may find investors once again back to trade fluctuations as news hits markets together on trade progress.”
Add concern to the outlook for the global economy, the yield curve between US three-year and five-year notes and between two-year and five-year papers inverted on Monday – the first sections of the central government debt curve to transform the financial crisis, with the exception of very short-term debt.
Analysts expect inversion of the two-year, 10-year yield curve – seen as a prediction for an American recession – to follow.
On Tuesday, benchmark returns fell to 2.9407 percent compared to the US’s nearly 2,991 percent on Monday. The two-year return also fell, but with a narrower margin affecting 2.8028 percent compared with an American nearly 2.833 percent.
Spread the spread between 10-year and two-year government debt at less than 14 points, its flat level since July 2007.
“Market prices occurring in the yield curve inversion from three to five segments of the curve, as well as a dip in 10-year the return below 3 percent yesterday, to strengthen these problems “about the US economy that can lead to a recession,” said Prakash Sakpal, economist at ING in Singapore.
However, he added that massive US manufacturing data released Monday indicated a stronger economic outlook, with new orders being an “important driving force” to increase activity.
Unlike how Asian stock markets could not hold up Monday rally, oil prices continued to rise after raising 4 percent the day before US-China trade arms and before a major OPEC meeting are expected to lead to cuts in supply.
was 1.2 percent higher at $ 53.58 per barrel and futures increased 1.1 percent to $ 62.35 a barrel.
The currency market, which traces the greenback against a basket of comrades, softens 0.2 percent to 96.808.
The dollar was 0.3 percent weaker against the yen of 113.28 and the euro increased 0.2 percent to $ 1,1373.
As the dollar weakened, China’s yuan continued to increase. Since Friday, it has added more than 1000 pips against the greenback and reached 6.88545 on Tuesday morning. At 0327 GMT, it was traded at $ 6,88613.
Federal Reserve Chairman Jerome Powell was scheduled to testify on Wednesday to a Congressional Economic Committee, but the hearing is postponed because of a national day of sorrow for President George H W Bush, who died on Friday.
The dollar was pressed last week by Powell’s comments that prices reached neutral levels, which markets are interpreted as a slowdown in the Fed price hike.
jumped on the weaker dollar and traded 0.40 percent to $ 1 235.88 per ounce.