Global markets in red as new US-China tariffs kick in

Global markets in red as new US-China tariffs kick in

China's retaliation also took effect on Sunday, with higher tariffs being rolled out in stages on a total of about $75 billion of USA goods.

Global stock prices plummeted Monday after the United States and China imposed new tariffs on each other's exports on September 1, stoking investors' fears a global recession is now all but inevitable by 2020 at the earliest.

Argentina's worldwide dollar bonds dropped to record lows and its financial stocks tumbled after President Mauricio Macri re-imposed capital controls on Sunday as the country battled to avoid its ninth sovereign default.

Still, some observers said the market's initial reaction was likely exaggerated by algorithm-run computers in thin trading on a United States holiday. But the official manufacturing survey still shows factory activity contracted for a fourth straight month. "There was not so much reaction" to the tariffs because they were "well anticipated", ABN Amro analyst Georgette Boele said.

Shares in Shanghai and blue-chips rose 0.8%.

At their July meeting policymakers at the European Central Bank all but promised to ease policy further as the bloc's growth outlook worsens.

The dollar index against a basket of six major currencies was down 0.1 per cent, while Wall Street stock futures weakened in early trade on Monday, setting a dour tone for Asian markets. The US 10-year treasury yields gain almost two basis points (bps) to 1.5% while the US Dollar (USD) also strengthens ahead of the US traders' return after extended weekend. The onshore yuan changed hands at 7.1806 at midday, 89 pips weaker than the late session close and 1.3 percent softer than the midpoint. A pledge by China's State Council to boost support for the economy helped.

The IHS Markit UK Manufacturing purchasing managers' index dived to 47.4 in August, the lowest level since July 2012, languishing below the 50 mark that indicates growth.

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Washington moved ahead Sunday with new tariffs on Chinese imports as it stepped up a high-pressure campaign aimed at coercing Beijing to sign a new trade deal.

A variety of studies suggest the tariffs will cost U.S. households up to $1,000 a year and the latest round will hit a significant number of United States consumer goods.

Asian stock markets were mostly lower Tuesday after investor jitters over U.S.

Hong Kong protests keep exerting pressure on HANG SENG.

Tension is also running high in Hong Kong, with police and protesters clashing in some of the most intense violence since unrest erupted more than three months ago over concerns Beijing is undermining democratic freedoms in the territory.

Thousands of protesters blocked roads and public transport links to Hong Kong airport on Sunday in a bid to draw world attention to their fight for democracy for the Chinese-ruled city which is facing its biggest political crisis in decades. China, eager to quell the unrest before the 70th anniversary of the founding of the People's Republic of China on October 1, has accused foreign powers of fomenting the unrest.

Down under, the Australian S&P/ASX 200 was 0.38% lower at 6,579.41 as the drop in oil prices sent energy stocks lower and fertiliser maker Incitec Pivot slipped on an earnings downgrade.

USA crude fell 0.6 per cent to US$54.77 per barrel and Brent was last at US$58.61, down 1.08 per cent on the day.

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