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GLOBAL MARKETS-Stocks grind lower as markets await clues on trade talks

Published 2019-11-05, 09:36 p/m
GLOBAL MARKETS-Stocks grind lower as markets await clues on trade talks
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* Asian stock markets: https://tmsnrt.rs/2zpUAr4

* Asian equities swing between gains and losses

* Treasury yields reverse course and fall in Asia

* Traders looking for more progress in U.S.-China trade row

By Stanley White

TOKYO, Nov 6 (Reuters) - Asian shares pulled back slightly on Wednesday as investors awaited new developments toward scaling back a bruising trade war between the United States and China.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0.11%. Australian shares .AXJO were down 0.09%, Chinese stocks .CSI300 drifted 0.08% lower while Japan's Nikkei stock index .N225 tacked on 0.2%.

Treasury yields fell slightly in Asia and crude oil futures also dipped as investors took a breather as U.S. and Chinese negotiators continued their efforts to seal a preliminary trade deal. The world's two biggest economies have signalled they are pushing hard for a 'phase one' trade agreement, possibly some time this month.

The dollar held onto overnight gains against the yen and the euro after better-than-expected data on the U.S. services sector, but some analysts warn it will be difficult to shake lingering concern about the global economic outlook.

"We've had a good run-up, but there may be some consolidation," said Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors in Sydney.

"The trade war is the biggest reason that global growth has weakened over the past 18 months. We would like to see tariffs scaled back. We're still waiting for clearer signs of a resolution."

U.S. stock futures ESc1 edged 0.11% lower on Wednesday in Asia after the S&P 500 gave up just 0.01% on Tuesday, having reached a record high in the previous trading session.

Traders and investors hope a preliminary Sino-U.S. trade pact will roll back at least some of the punitive tariffs that Washington and Beijing have imposed on each other's goods, but it is still uncertain when or where U.S. President Donald Trump will meet Chinese President Xi Jinping to sign the agreement. the onshore market the yuan CNY=CFXS traded at 6.9976 versus the dollar, approaching a three-month high as currency traders took their cue from hopes for a trade deal.

Treasury prices rose slightly in Asia, recovering from a sell-off on Tuesday after data from the Institute for Supply Management (ISM) showed the U.S. services sector expanded more than expected in October.

The yield on benchmark 10-year Treasury notes US10YT=RR fell to 1.8442% in Asia on Wednesday, while the two-year yield US2YT=RR fell slightly to 1.6145%.

A jump in oil prices overnight also faded in Asian trading.

U.S. crude CLc1 fell 0.47% to $56.96 per barrel. Brent crude LCOc1 fell 0.52% to $62.63 per barrel.

Elsewhere in the currency market, the dollar continued to benefit from the positive ISM data.

The dollar traded at 109.076 yen JPY=EBS , close to its highest since Aug. 1. The greenback also changed hands at $1.1075 per euro EUR=EBS , approaching its highest level since Oct. 16. (Editing by Lincoln Feast & Shri Navaratnam)

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