* Asian Equity Markets: https://tmsnrt.rs/2zpUAr4 Chapter19659002achte * US Customs Tariffs on EU Commodities Already Low Sentiment
* Tax Capital Return Shows Declining Confidence in Growth
Safe Ports Increase * 19659002 over concerns of oversupply
By Stanley White
TOKYO, October 3 (Reuters) – Asian stocks, already under pressure from rising global growth fears, fell on Thursday after New York markets fell overnight because the US opened a new trade war front by saying that they will introduce tariffs of $ 7.5 billion on goods from the European Union.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.38%. Japan's Nikkei stock index fell 1
The return on two-year US government yields was approaching a two-year low and the dollar fell against major currencies as weakened economic data exposed the damage that the trade war with China has already caused to the US economy.
The oil future widened its decline in Asia as a larger-than-expected increase in US commodity stocks and rising evidence that economic growth slowed to a lower energy demand.
The United States and China have already obtained tariff rates on each other's goods in a long-standing trade series that has raised the risk of recession and caused major central banks to facilitate monetary policy.
The likelihood of Europe reacting in the form of US tariffs is likely to increase fuel concern that global growth is set for a longer period of stagnation.
"In the short term, it looks a bit dry (for markets) given the declines we've already had over the last two days," said William O & # 39; Loughlin, portfolio manager at Rivkin Asset Management in Sydney.
"EU tariff rates apply. I agree that sentiment for equities will be weak. The bond market says there is no certainty of future growth."
US stock futures increased by 0.21%, but this did little to to boost sentiment after Wall Street stocks suffered their sharpest one-day fall in nearly six weeks Wednesday.
The United States said on Wednesday that they would adopt 10% tariffs for European Airbus flights and 25% tariffs on French wine, Scotch and Irish whiskey and cheese from across the continent as punishment for illegal EU flight subsidies.
The tariffs announced on Wednesday were approved by the World Trade Organization, but may still lead to friction across the Atlantic.
EU manufacturers are already facing US tariffs on steel and aluminum and a threat from US President Donald Trump to punish EU cars and car parts.
The two-year return fell to 1.4760%, close to a two-year low of 1.4280%, after a weak US workplace report depressed higher expectations t hat the Federal Reserve will cut interest rates this month.
Traders see a 74.4% chance that the Fed will cut interest rates by 25 basis points to 1.75% -2.00% in October, up from 39.6% on Monday, according to CME Group's FedWatch tool.
Betting on an interest rate cut may increase further if US wage rules that are not farm-based by Friday show weakness in the labor market.
The dollar index against a basket of six major currencies stood at 99,020, extending a retreat from a two-year high reached on Tuesday.
Spot gold, a safe haven asset that investors often buy during increased risk, rose 0.02% to $ 1,499.59 an ounce.
U.S. crude oil dipped 0.3% to $ 52.48 a barrel. In addition to a declining global economy, energy dealers are concerned about an oversupply market and the chance of geopolitical friction in the Middle East. (Editing by Richard Borsuk)