* Global stocks gauge set for worst day of 2019
* China's yuan weakest since late December
* China to impose tariffs on U.S. goods despite Trump warning
* U.S. Treasuries, yen benefit from safe-haven bid
* For Reuters Live Markets blog on European and UK stock markets, please click on: LIVE/
By Lewis Krauskopf
NEW YORK, May 13 (Reuters) - Global stocks tumbled on Monday and the Chinese yuan fell to its lowest level since December as a trade dispute between the United States and China escalated.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed 1.82%, on pace for its biggest one-day drop of 2019 as it touched a two-month low. Wall Street's main indexes tumbled over 2% in initial trading.
China said it would impose higher tariffs on a range of U.S. goods, striking back in its trade war with Washington shortly after U.S. President Donald Trump warned it not to retaliate in the long-running trade dispute between the world's two biggest economies. piled into safe-haven assets, including U.S. Treasuries and the Japanese yen.
“It's clear that there is a lot of nervousness around the U.S.-China trade negotiations and concern that it's really deteriorating pretty significantly and that's impacting all areas of markets,” said Kristina Hooper, chief global market strategist at Invesco in New York.
China's finance ministry said it plans to set import tariffs ranging from 5 percent to 25 percent on a target list worth about $60 billion. Trump on Friday ordered his trade chief to begin the process of imposing tariffs on all remaining imports from China, but investors had taken solace in some comments from officials about the negotiations.
Investors "have hoped for the best and wanted to believe the best. So they hold onto any small sign of better relations between U.S. and China," Hooper said.
But, she added, "clearly this relationship is deteriorating. It's not what investors had hoped it was on Friday.”
On Monday, the Dow Jones Industrial Average .DJI fell 612.77 points, or 2.36%, to 25,329.6, the S&P 500 .SPX lost 68.52 points, or 2.38%, to 2,812.88 and the Nasdaq Composite .IXIC dropped 250.57 points, or 3.17%, to 7,666.37. pan-European STOXX 600 index .STOXX lost 1.03%.
In currencies, the yuan CNH= weakened to as far as 6.92 against the U.S. dollar, its lowest level since Dec. 24. dollar index .DXY , which measures the greenback against a basket of currencies, fell 0.06%, with the euro EUR= up 0.01% to $1.1234.
U.S. Treasury yields fell to six-week lows as investors piled into low-risk assets. 10-year notes US10YT=RR last rose 15/32 in price to yield 2.4015%, from 2.455% late on Friday.
Ten-year yields fell below those on three-month Treasury bills US3MT=RR . A sustained inversion of this part of the yield curve has preceded every U.S. recession in the past 50 years.
Spot gold XAU= added 0.9% to $1,297.60 an ounce.
Oil prices were boosted by growing concern over supply disruptions in the Middle East. crude CLcv1 fell 0.05% to $61.63 per barrel and Brent LCOcv1 was last at $70.81, up 0.27% on the day.
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https://tmsnrt.rs/2LF2yVz GRAPHIC-Global assets in 2019
http://tmsnrt.rs/2jvdmXl GRAPHIC-World FX rates in 2019
http://tmsnrt.rs/2egbfVh
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