Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Fears of prolonged trade war weigh on Asia stocks; bonds rally

Stock MarketsMay 30, 2019 01:43AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A man looks on in front of an electronic board showing stock information at a brokerage house in Nanjing

By Shinichi Saoshiro

TOKYO (Reuters) - Asian stocks tracked Wall Street losses on Thursday as the latest exchanges between Beijing and Washington signaled the heightened risk of a prolonged trade war, stoking investors' concerns about the impact on global economic growth.

European stock futures were higher in early trade, trimming some losses after falling sharply the previous day. The pan-region Euro Stoxx 50 futures were up 0.46%, German DAX futures edge up 0.34% and FTSE futures gained 0.25%.

"We oppose a trade war but are not afraid of a trade war. This kind of deliberately provoking trade disputes is naked economic terrorism, economic chauvinism, economic bullying," Chinese Vice Foreign Minister Zhang Hanhui said, when asked about the trade war with the United States.

His comments followed reports from Chinese newspapers that Beijing could use rare earths to strike back at Washington after U.S. President Donald Trump remarked he was "not yet ready" to make a deal with China over trade.

As investors switched out of equities, safe-haven assets such as government bonds found favor, with yields on German benchmark debt approaching record lows.

The Shanghai Composite Index fell 0.7% and Hong Kong's Hang Seng lost 0.4%.

Japan's Nikkei was down 0.5% and Australian stocks shed 0.85%.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped to a fresh four-month low before finding a bit of traction to edge up 0.1%.

"The equity markets are in the midst of pricing in a long-term trade war, with participants shaping their portfolios in anticipation of a protracted conflict," said Soichiro Monji, senior strategist at Sumitomo Mitsui DS Asset Management.

"The upcoming G20 summit could provide the markets with relief, as the United States and China could use the event to begin negotiating again over trade."

The G20 meeting is set for June 28-29 in Japan.

Observers elsewhere expressed less optimism toward the G20 meeting.

"It seems to us that a Trump-Xi meeting on the sidelines of the G20 meeting is more wishful thinking than hard political reality," wrote Marc Chandler, chief market strategist at Bannockburn Global Forex. "This is a moment that defines before and after."

Amid the flight-to-safety, Germany's 10-year bond yield fell to a three-year trough of minus 0.179% overnight. A drop below minus 0.200% set in 2016 would take the yield to a record low.

Spanish and Portuguese 10-year yields fell to record lows as deeply negative German Bund yields have encouraged investors to look elsewhere for returns. [GVD/EUR]

The 10-year U.S. Treasury yield stood at 2.267% after falling to a 20-month low of 2.210% on Wednesday.

Notwithstanding lower Treasury yields, the dollar index against a basket of six major currencies was steady at 98.085 and in reach of a two-year peak of 98.371 set last week, with the greenback serving as a safe haven.

The euro was a shade higher at $1.1137, pulling back slightly following three successive days of losses.

The dollar was little changed at 109.660 yen after bouncing back from a two-week low of 109.150 brushed on Wednesday.

Oil prices rose modestly after an industry report showed a decline in U.S. crude inventories that exceeded analyst expectations.

The rise followed volatile trading on Wednesday, when oil prices fell to near three-month lows at one point as trade war fears gripped the commodity markets.

U.S. crude futures were up 0.66% at $59.20 per barrel after brushing $56.88 the previous day, their lowest since March 12.

Brent crude added 0.37% to $69.71 per barrel.

Trade worries have weighed on oil but supply constraints linked to the Organization of the Petroleum Exporting Countries' output cuts and political tensions in the Middle East have offered some support.

Fears of prolonged trade war weigh on Asia stocks; bonds rally
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Hank Chef
Hank Chef May 30, 2019 1:17AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
But Red means up in Chinese stock..
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email