The rally in risk assets eased on Monday, with stocks in Asia trading mixed as doubts on the possibility for progress in the U.S.-China trade talks crept back into markets.
Resurgent worries on global growth are driving bonds higher and threatening to dent this year’s rally in riskier assets, with stocks dipping last week. Equities rallied in China where exchanges reopened after a one-week holiday, and climbed in Hong Kong. Shares in Sydney fell while those in South Korea edged higher. European futures pointed to a firm start. Australia’s 10-year yields slid four basis points. Japan is shut for a holiday.
The U.S. and China may struggle to reach a deal before the March 1 deadline for higher tariffs, while warnings mount that the dispute is curbing the global economic expansion and denting corporate profits. Chinese Vice Premier Liu He will join Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer in Beijing for high-level trade talks this week. In Washington, the U.S. government could be headed for another shutdown as political tensions flare between Congress and the president.
“We still have concerns about global growth and that centers on those U.S.-China negotiations,” Kerry Craig, global market strategist at JPMorgan Asset Management, told Bloomberg TV from Melbourne. “We’re unlikely to see any massive moves this week saying we’re going to get a deal on that.”