TOKYO (Reuters) – Asian stocks and Wall Street futures fell Wednesday on growing concern U.S.-China trade talks hold after President Donald Trump failed to provide new information on when the two countries would sign a trade agreement.
FILE PHOTO: A man looks at an electronic board showing the Nikkei stock index outside a brokerage house in Tokyo, Japan, January 7, 2019. REUTERS / Kim Kyung-Hoon
MSCI's broadest index of Asia-Pacific stocks outside Japan .MIAPJ0000PUS drops 0.2%. Australian stocks were down 0.17%, while Japan's Nikkei stock index. N225 slipped 0.38%.
The dollar drifted in Asia after Trump said a trade deal was "close" but gave no new details on when or where a deal would be made, which disappointed investors in what was billed as an important speech about his administration's economic policy.
Trump also rattled some investors by threatening China with even more tariffs if they do not sign a deal.
Oil prices then fell in the immediate prospect of a resolution to a 16-month long trade war between the world's two largest economies, suggesting less energy demand in the future.
Expectations of a "phase one" trade agreement some time this month have been a key factor supporting equities and risky assets recently. However, the lack of significant progress for an agreement has only heightened the doubt as to whether a trade agreement will take place at all.
“I'm totally worried. The clock is ticking, says Michael McCarthy, chief strategist for CMC Markets in Sydney.
“The markets now expect significant progress over the next week or so, and if not, confidence can crumble. There are divergent interpretations of Trump's comments. I tend to go with goods like oil and copper because they are linked to global demand, so their decline is significant. "
U.S. equity futures ESc1 fell 0.14% in Asia after the S&P 500. SPP gained 0.16% gain on Tuesday. The S&P 500 and Nasdaq hit highs all the time during trading on Tuesday, but stocks ended in session stops following Trump's speech.
Washington and Beijing have imposed tariffs on each other's goods in a bitter dispute over Chinese trade practices that the Trump administration says are unfair.
The settlement has fueled the global financial markets and raised the risk of recession for some economies as global trade slows.
Over the past few weeks, both sides have indicated that they are making progress toward an agreement that could potentially scale down some tariffs, but a lack of additional information is beginning to upset some investors in equities and other risky assets.
As a reminder of the potential for further friction, Trump said Tuesday that he would raise tariffs on Chinese goods "very substantially" if China does not agree on an agreement. "And it's going to vote for other countries that are also abusing us," he added.
In currencies, the dollar was just a shade lower of 108.99 yen JPY = EBS, and withdrew slightly from a five-month high did not reach November 7.
Return on benchmark portfolio 10-year Treasuries US10YT = RR rose slightly to 1.9277%, but is likely to move in a narrow range before data arriving later Wednesday that is expected to show US consumer prices accelerated slightly in October.
U.S. crude oil CLc1 dipped 0.25% to $ 56.66 a barrel to worry about weakened oil demand.
LME Copper CMCU3 sales declined 0.4% to $ 5,854 per tonne by 2337 GMT, and had previously reached the weakest since November 1 to $ 5,842 per tonne. Copper, widely used in power and construction, is seen as a measure of economic health.
In addition, China accounts for about half of the world's demand for copper, and many other metals.