Published: Tue, October 08, 2019
Money | By Ethel Goodwin

China Statements 'More Positive' as Trade Talks With US Resume - Kudlow

China Statements 'More Positive' as Trade Talks With US Resume - Kudlow

Asian shares edged higher on Monday after data showed the US unemployment rate dropped to the lowest in nearly 50 years, easing concerns of a slowdown in the world's largest economy. Shares of index heavyweight Fast Retailing, the company behind the Uniqlo chain of apparel stores, slipped 0.7%.

The Nikkei 225 lost 34.95 points, or 0.2%, to 21,375.25.

However, that weak data also raised hope for easier monetary policy from the Federal Reserve.

Trade tensions have risen recently after reports said U.S. President Donald Trump's administration is deliberating ways to limit American investors' portfolio flows into China, which includes de-listing Chinese companies from U.S. stock exchanges.

The modest increase in U.S.jobs has eased some of these concerns, but traders warn that downside risks loom large on the horizon. This disappointment, however, was offset by the news that unemployment hit a fresh 50-year low in September. Non-farm payrolls also grew in September, but slightly less than expected. Markets have been quick to swing on any hint of movement in the U.S.

The tensions have threatened global economic growth.

With that said, Ward doesn't believe a "real U.S". -China trade negotiations that begin later this week after talks collapsed five months ago.

The major Asia Pacific stock indexes finished mixed on Monday as investors shifted their focus away from the USA economy and on to the renewed U.S. "China may buy more agricultural goods but it's unclear whether or not that partial agreement will be a big enough win for the U.S".

The offshore yuan weakened 0.3% to 7.1312 per dollar.

"It looks as if we are back to considering the merits of a narrow trade deal today, as news stories break suggesting that China is not looking to make a broader trade deal along the lines it is reported the USA is seeking", noted ING's Asia Pacific chief economist and head of research Robert Carnell.

"Given the high level of uncertainty that's out there and the cross-currents - the cross-currents being escalating geopolitical risks on the one hand and increased monetary easing on the part of the world's global central banks - it's really hard at this point to determine which force is going to gain the upper hand", said Ed Campbell, a portfolio manager and managing director at QMA.

The Fed has already lowered interest rates twice this year, but a strong jobs market suggests further rate cuts may not be necessary.

Bond prices fell, pushing the yield on the 10-year Treasury rose to 1.55% from 1.51% late Friday.

Japanese equities closed little changed, while Shanghai markets are yet to re-open after holidays.

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