Asian markets subdued ahead of key US-China tariff deadline

Asian stocks edged up on Monday following surprisingly strong US jobs data, but gains were subdued amid concerns over the ongoing US-China trade war.

Concerns over Chinese economic slowdown due to the prolonged trade battle hit Asian equities as investors awaited news of whether the US will go ahead with plans to raise tariffs on Chinese imports next week.

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Japan’s Nikkei 225 gained 0.33 per cent, while MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.27 per cent. 

China’s SSE Composite index edged up slightly at 0.08 per cent, while Hong Kong’s Hang Seng index was virtually flat, gaining 0.03 per cent. 

European equities are expected to give up some of the gains made on Friday following strong US non-farm payrolls data.

The FTSE opened slightly lower, and was down around 0.2 per cent by 8.30am. Germany’s DAX and France’s CAC 40 each lost around 0.1 per cent in early trading. 

“The markets were relatively timid at the start of the session, which is forgivable considering what is at stake,” said Spreadex’s Connor Campbell.

“The pound just about continued its pre-election rise, adding 0.2% against the dollar and 0.1% against the euro following a Survation poll giving the Tories a 14-point lead,” he said.

“Meagre movements, admittedly, but enough to send cable to a fresh 7-month peak of $1.317. Even better, it leaves sterling at a 31-month high against its single currency cousin, i.e. its best price since not long before the 2017 election.”

The US-China trade war is set to remain at the forefront of traders’ minds this week, with Washington scheduled to impose tariffs on more than $150bn of Chinese imports on 15 December. 

Beijing confirmed last week that it will waive import tariffs on some US pork and soy bean imports, raising hopes that progress could be made in trade talks.  

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Chinese assistant commerce minister Ren Hongbin said on Monday that the country hopes it can reach a trade agreement with the US that satisfies both sides as soon as possible.

But Campbell warned: “‘as soon as possible’ still might not be soon enough. Especially since, at present, there are no plans for face-to-face talks between Trump and Xi Jinping.”