Trump also got more pushback on his tariff plans from the U.S. Congress on Wednesday as a bipartisan group of senators, led by Republican Rob Portman of Ohio, launched new legislation that would scale back the president's power to impose tariffs for national security reasons under a Cold War-era trade law.
SYDNEY: Asian shares battled to extend a global rebound on Tuesday after U.S. President Donald Trump seemed to quash hopes of a trade truce with China, dampening risk appetite across the region.
Japan's Nikkei managed to edge up 0.4 percent, but MSCI's broadest index of Asia-Pacific shares outside Japan was all but flat.
E-Mini futures for the S&P 500 eased back 0.35 percent, after rising sharply overnight.
In an interview with The Wall Street Journal, Trump said he expects to move ahead with raising tariffs on $200 billion in Chinese imports to 25 percent from 10 percent currently.
Trump said it was "highly unlikely" he would accept China's request to hold off on the increase, planned for Jan. 1.
The comments ran counter to recent speculation about a possible deal when Trump meets with Chinese President Xi Jinping at the G20 summit in Buenos Aires later this week.
"Trump's pessimistic view on the chances of a game-changing China trade deal may puncture global equity markets' optimistic start to the week," said Sean Callow, a senior FX analyst at Westpac in Sydney.
"Combined with last week's harsh report from the U.S. trade representative, investors have only the flimsiest hope that the Trump-Xi meeting in Argentina will amount to more than a hill of soybeans."
That put trade-sensitive currencies, including the Australian dollar
The euro edged up a shade to $1.1333
OIL SHIFTS RISKS ON INFLATION, FED
Shares in Apple Inc
Trump's remarks came just as the mood among investors had shown signs of brightening and Wall Street took heart from an upbeat holiday shopping period. [.N]
Even oil managed to regain a little ground after the gut-wrenching slide of recent weeks. [O/R]
The Dow <.DJI> ended Monday up 1.46 percent, while the S&P 500 <.SPX> gained 1.55 percent and the Nasdaq <.IXIC> 2.06 percent.
The rally came after the S&P 500 on Friday recorded its lowest close in six months, down more than 10 percent from September's peaks and back in "correction" territory.
In commodity markets, oil prices had climbed nearly 3 percent on Monday in what was seen as largely a technical correction after weeks of losses.
Early Tuesday, U.S. crude
Analysts at National Australia Bank noted the steep retreat in oil would drag on U.S. inflation in coming months, perhaps offering further reason for the Federal Reserve to go slower on tightening.
"This is a starkly different picture to just a few months ago," said NAB's market strategist Tapas Strickland.
"A stable to lower inflation outlook means there is no urgency for the Fed to hike rates," he added. "An early 2019 pause is thus becoming more probable."
The futures market <0#FF:> has already shifted to imply two more hikes at most next year, while the Fed itself is predicting three and more in 2020.
Ears will thus be pricked for a speech by Fed Vice Chairman Richard Clarida later on Tuesday, ahead of an appearance by Chair Jerome Powell the day after. - Reuters
Earlier report:
Asia markets mood to be tested by Trump warning on China
SYDNEY A tentative rebound in global share markets will be tested in Asia on Tuesday after U.S. President Donald Trump quashed hopes he might strike a truce on trade with China, dampening risk appetite across the region.
In an interview with The Wall Street Journal, Trump said he expects to move ahead with raising tariffs on $200 billion in Chinese imports to 25 percent from 10 percent currently.
Trump said it was "highly unlikely" he would accept China's request to hold off on the increase.
The comments ran counter to recent speculation about a possible deal when Trump meets with Chinese President Xi Jinping at the G20 summit in Buenos Aires later this week.
"Trump's pessimistic view on the chances of a game-changing China trade deal may puncture global equity markets' optimistic start to the week," said Sean Callow, a senior FX analyst at Westpac in Sydney. "Combined with last week's harsh report from the U.S. trade representative, investors have only the flimsiest hope that the Trump-Xi meeting in Argentina will amount to more than a hill of soybeans."
The early reaction was limited to a drop in trade-sensitive currencies, including the Australian dollar
The U.S. dollar remained firm for the moment at 113.60 yen
Shares in Apple Inc
Trump's remarks came just as the mood among investors had shown signs of brightening. Wall Street took heart from an upbeat holiday shopping period. [.N]
European stocks also bounced on Monday, on talk that Italy was preparing to rework spending plans that have fuelled tensions with the European Union, though coalition leaders later said the government was sticking to its main 2019 budget goals as it awaits a full cost analysis of its most important spending measures for next year. Even oil managed to regain a little ground after the gut-wrenching slide of recent weeks. [O/R]
The Dow <.DJI> ended Monday up 1.46 percent, while the S&P 500 <.SPX> gained 1.55 percent and the Nasdaq <.IXIC> 2.06 percent.
The rally came after the S&P 500 on Friday recorded its lowest close in six months, down more than 10 percent from September's peaks, putting it in "correction" territory.
In commodity markets, oil prices climbed nearly 3 percent on Monday in what was seen as largely a technical correction after weeks of losses.
Brent crude
Earlier report:
Limited time offer:
Just RM5 per month.
