Asian stocks rose in step with their global peers while safe-haven bonds retreated on Tuesday, as signs Sino-US trade hostilities might be easing for now helped restore investor confidence after the previous session's rout.

Supporting the market mood, US President Donald Trump on Monday flagged the possibility of a trade deal with China and said he believed Beijing was sincere in its desire to reach an agreement. Global markets had been roiled at the start of the week by new tariffs from the world's two largest economies.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3% after dropping 1.3% the previous day.

The Shanghai Composite Index advanced 1%.

South Korea's KOSPI added 0.8% and Japan's Nikkei rose 1.1%.

Equity markets may have found traction for now but the longer-term outlook for risk assets, buffeted repeatedly by trade concerns, remained shaky.

"There is still a large element of uncertainty regarding the US-China trade dispute. It remains difficult to foresee a resolution, and this will continue to weigh on equity market sentiment," said Shusuke Yamada, chief Japan FX and equity strategist at Bank Of America Merrill Lynch.

"Apart from the trade war, the equity markets also have to keep an eye on Brexit proceedings, monetary policy of key players such as the European Central Bank and moves in the Chinese yuan."

China's onshore yuan nudged down to a fresh 11-year low of 7.1566 per dollar.

China has allowed the tightly-managed yuan to slide some 3.6% so far this month as trade tensions with the United States worsened. This has triggered fears of a global currency war, in which countries try to weaken their currencies in an attempt to soften the blows of a broader economic slowdown. "It is clear that the trade conflict between the United States and China is getting ever more serious. The two may still opt to negotiate, but prospects for a quick resolution have diminished greatly as neither side can back down," said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities.

"The trade conflict only increases the torment on the global economy."

The dollar held gains made the previous day helped by a rebound in US Treasury yields.

The dollar index versus a basket of six major currencies stood at 97.990, having risen about 0.5% overnight.

The benchmark 10-year US Treasury yield was at 1.523%, pulled back from a three-year low of 1.443% reached on Monday on the back of wide-spread risk aversion.

The Japanese 10-year government bond yield was up 2.5 basis points at minus 0.255% after plumbing minus 0.285% on Monday, its lowest since July 2016.

The greenback traded at 105.770 yen following a 0.7% gain on Monday, when it had brushed an eight-month low of 104.460. The euro was effectively flat at $1.1104 after losing 0.4% on Monday.

The Australian dollar, sensitive to developments in China, Australia's largest trading partner, was steady at $0.6773 following a gain of 0.3% the previous day.

Crude oil prices recovered some ground as the broader markets stabilised, trimming some of their significant losses the previous day on the prospect of crude from Iran, currently facing sanctions, hitting the market.

Brent crude futures were up 0.46% at $58.97 per barrel after losing 1% the previous day. US crude rose 0.6% to $53.96 per barrel.

Oil prices fell on Monday after French President Emmanuel Macron said preparations were underway for a meeting between Iranian President Hassan Rouhani and President Trump in the coming weeks to find a solution to a nuclear standoff.

Asian stocks rose in step with their global peers while safe-haven bonds retreated on Tuesday, as signs Sino-US trade hostilities might be easing for now helped restore investor confidence after the previous session's rout.

Asian stocks rose in step with their global peers while safe-haven bonds retreated on Tuesday, as signs Sino-US trade hostilities might be easing for now helped restore investor confidence after the previous session's rout. Supporting the market mood, US President Donald Trump on Monday flagged the possibility of a trade deal with China and said he believed Beijing was sincere in its desire to reach an agreement. Global markets had been roiled at the start of the week by new tariffs from the world's two largest economies. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3% after dropping 1.3% the previous day. The Shanghai Composite Index advanced 1%. South Korea's KOSPI added 0.8% and Japan's Nikkei rose 1.1%. Equity markets may have found traction for now but the longer-term outlook for risk assets, buffeted repeatedly by trade concerns, remained shaky. "There is still a large element of uncertainty regarding the US-China trade dispute. It remains difficult to foresee a resolution, and this will continue to weigh on equity market sentiment," said Shusuke Yamada, chief Japan FX and equity strategist at Bank Of America Merrill Lynch. "Apart from the trade war, the equity markets also have to keep an eye on Brexit proceedings, monetary policy of key players such as the European Central Bank and moves in the Chinese yuan." China's onshore yuan nudged down to a fresh 11-year low of 7.1566 per dollar. China has allowed the tightly-managed yuan to slide some 3.6% so far this month as trade tensions with the United States worsened. This has triggered fears of a global currency war, in which countries try to weaken their currencies in an attempt to soften the blows of a broader economic slowdown. "It is clear that the trade conflict between the United States and China is getting ever more serious. The two may still opt to negotiate, but prospects for a quick resolution have diminished greatly as neither side can back down," said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities. "The trade conflict only increases the torment on the global economy." The dollar held gains made the previous day helped by a rebound in US Treasury yields. The dollar index versus a basket of six major currencies stood at 97.990, having risen about 0.5% overnight. The benchmark 10-year US Treasury yield was at 1.523%, pulled back from a three-year low of 1.443% reached on Monday on the back of wide-spread risk aversion. The Japanese 10-year government bond yield was up 2.5 basis points at minus 0.255% after plumbing minus 0.285% on Monday, its lowest since July 2016. The greenback traded at 105.770 yen following a 0.7% gain on Monday, when it had brushed an eight-month low of 104.460. The euro was effectively flat at $1.1104 after losing 0.4% on Monday. The Australian dollar, sensitive to developments in China, Australia's largest trading partner, was steady at $0.6773 following a gain of 0.3% the previous day. Crude oil prices recovered some ground as the broader markets stabilised, trimming some of their significant losses the previous day on the prospect of crude from Iran, currently facing sanctions, hitting the market. Brent crude futures were up 0.46% at $58.97 per barrel after losing 1% the previous day. US crude rose 0.6% to $53.96 per barrel. Oil prices fell on Monday after French President Emmanuel Macron said preparations were underway for a meeting between Iranian President Hassan Rouhani and President Trump in the coming weeks to find a solution to a nuclear standoff.

Asia stocks, bond yields climb as trade war fears ebb

Oil futures rose on Monday on increasing concerns about supply disruptions in the crucial producing region of the Middle East even as investors and traders fretted over global economic growth prospects amid a standoff in the <a href="https://www.wionews.com/business-economy/oil-falls-on-trade-dispute-despite-surprise-drop-in-us-crude-inventories-217140">Sino-US&nbsp;trade talks</a>.

Brent crude futures were at $71.00 a barrel, up 38 cents, or 0.5%, from their last close by 0624 GMT.

The US&nbsp;West Texas Intermediate (WTI) futures were at $61.73 per barrel, up 7 cents, or 0.1%, from their previous settlement.

Saudi Arabia said on Monday that two Saudi oil tankers were among vessels targeted by a<a href="https://www.wionews.com/world/two-saudi-tankers-came-under-sabotage-attack-off-uae-no-casualties-218248"> "sabotage attack"</a> off the coast of the United Arab Emirates, condemning it as an attempt to undermine the security of global crude supplies.

Saudi Arabia and the UAE are the largest and third-largest producers, respectively, in the Organisation of the Petroleum Exporting Countries (OPEC), according to the latest survey by Reuters.

"Rising geopolitical tensions in the Middle East, together with sharply declining oil supplies from Venezuela and Iran, will remain bullish for prices," said Abhishek Kumar, head of analytics at Interfax Energy in London.

Markets have been supported by Washington's bid to cut Iran's oil exports to zero and reduce exports from Venezuela, where infrastructure problems have also cut output.

The United States reimposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and world powers last year.

Investors are also focused on tightened supplies following OPEC-led production cuts since the start of the year. There is a consensus that OPEC and its producer allies will extend the six-month output-cut agreement when they meet in June.

But the trade friction between Washington and China, which intensified last week will keep a lid on prices, said Kumar.

The United States and China together accounted for 34% of global oil consumption in the first quarter of 2019, data from the International Energy Agency showed.

"The US-China trade war is set to intensify, which will limit gains in prices," Kumar said.

"Market participants will closely watch China's retaliatory steps in response to the imposition of additional US tariffs on Chinese goods," Kumar said, adding the dispute "could be particularly detrimental to the growth in global oil demand".

The trade turmoil has prompted hedge funds to cut their bullish wagers on US crude oil to the lowest level in a month and raised their bets on Brent crude to the highest in nearly seven months, US&nbsp;government data showed on Friday.

Separately, in an early indicator of future output, US&nbsp;energy companies last week reduced the number of oil rigs operating for the third time in four weeks, cutting them by two and bringing the count down 805.

Oil futures rose on Monday on increasing concerns about supply disruptions in the crucial producing region of the Middle East even as investors and traders fretted over global economic growth prospects amid a standoff in the Sino-US trade talks.

Oil futures rose on Monday on increasing concerns about supply disruptions in the crucial producing region of the Middle East even as investors and traders fretted over global economic growth prospects amid a standoff in the Sino-US trade talks. Brent crude futures were at $71.00 a barrel, up 38 cents, or 0.5%, from their last close by 0624 GMT. The US West Texas Intermediate (WTI) futures were at $61.73 per barrel, up 7 cents, or 0.1%, from their previous settlement. Saudi Arabia said on Monday that two Saudi oil tankers were among vessels targeted by a "sabotage attack" off the coast of the United Arab Emirates, condemning it as an attempt to undermine the security of global crude supplies. Saudi Arabia and the UAE are the largest and third-largest producers, respectively, in the Organisation of the Petroleum Exporting Countries (OPEC), according to the latest survey by Reuters. "Rising geopolitical tensions in the Middle East, together with sharply declining oil supplies from Venezuela and Iran, will remain bullish for prices," said Abhishek Kumar, head of analytics at Interfax Energy in London. Markets have been supported by Washington's bid to cut Iran's oil exports to zero and reduce exports from Venezuela, where infrastructure problems have also cut output. The United States reimposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and world powers last year. Investors are also focused on tightened supplies following OPEC-led production cuts since the start of the year. There is a consensus that OPEC and its producer allies will extend the six-month output-cut agreement when they meet in June. But the trade friction between Washington and China, which intensified last week will keep a lid on prices, said Kumar. The United States and China together accounted for 34% of global oil consumption in the first quarter of 2019, data from the International Energy Agency showed. "The US-China trade war is set to intensify, which will limit gains in prices," Kumar said. "Market participants will closely watch China's retaliatory steps in response to the imposition of additional US tariffs on Chinese goods," Kumar said, adding the dispute "could be particularly detrimental to the growth in global oil demand". The trade turmoil has prompted hedge funds to cut their bullish wagers on US crude oil to the lowest level in a month and raised their bets on Brent crude to the highest in nearly seven months, US government data showed on Friday. Separately, in an early indicator of future output, US energy companies last week reduced the number of oil rigs operating for the third time in four weeks, cutting them by two and bringing the count down 805.

Oil prices rise as Middle East tanker attack increases supply concerns

Asian share markets bounced broadly on Monday as investors dared to hope for both progress at Sino-US trade talks in Washington this week and more policy stimulus from major central banks.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 1 per cent, recovering from a sharp fall last Friday.

Japan's Nikkei climbed 1.8 per cent to its highest level of the year so far, while Australia's main index rose 0.7 per cent.

Shanghai blue chips bounced 1.6 per cent.

But E-Mini futures for the S&amp;P 500 were flat as the trade was thinned by a holiday in US markets.

The Dow and the Nasdaq had boasted their eighth consecutive weekly gains on wagers the United States and China would hammer out an agreement resolving their protracted trade war.

The two sides will resume negotiations this week, with US President Donald Trump saying he may extend a March 1 deadline for a deal. Both reported progress in five days of talks in Beijing last week.

"That does not rule out a setback or two between now and the start of March," said analysts at CBA in a note.

"Even so, we still think that both sides have good reasons to want to get to an agreement. And, so motivated, it makes an agreement more likely than not."

There are also growing expectations of more reflationary policies from some of the world's more powerful central banks.

The need for stimulus was highlighted on Monday by data showing a sharp slide in Singapore exports and a big drop in foreign orders for Japanese machinery goods.

Beijing is already taking action with China's banks making the newest loans on record in January in an attempt to jumpstart sluggish investment.

Minutes of the Federal Reserve's last policy meeting are due on Wednesday and should provide more guidance on the likelihood or not for rate hikes this year. There is also talk the bank will keep a much larger balance sheet than previously planned.

"Given the range of speakers since the January meeting who support "patience," the Fed minutes should reiterate a dovish message overall," said analysts at TD Securities in a note.

A roll call of Fed officials is speaking at various events this week including a round table on Friday covering the future of its balance sheet.

EYEING THE ECB

The European Central Bank's Olli Rehn told a German newspaper on Sunday that recent data point to a weakening eurozone economy and interest rates would remain at the current level until monetary policy goals have been met.

That came amid much speculation the ECB would launch another round of Targeted Long-Term Refinancing Operations (TLTRO) to support bank lending.

The risk of an easy ECB saw the euro touch a three-month low on Friday before bouncing on dovish comments from Fed officials.

The single currency edged up to $1.1309 but was still within the $1.1213/1.1570 trading range that has held since mid-October. The dollar was steady on the yen at 110.53, having backed away from a two-month top of 111.12.

Sterling was a shade firmer at $1.2909 ahead of Brexit talks between British Prime Minister Theresa May and European Commission President Jean-Claude Juncker this week.

All of which left the dollar at 96.811 on a basket of currencies, inching away from last week's top of 97.368.

In commodity markets, spot gold firmed 0.28 per cent to $1,324.70 per ounce.

Oil prices reached their highest for the year so far, buoyed by OPEC-led supply cuts and US sanctions on Iran and Venezuela.

US crude was last up 36 cents at $55.95 a barrel, while Brent crude futures rose 20 cents to $66.45.

Asian share markets bounced broadly on Monday as investors dared to hope for both progress at Sino-US trade talks in Washington this week and more policy stimulus from major central banks.

Asian share markets bounced broadly on Monday as investors dared to hope for both progress at Sino-US trade talks in Washington this week and more policy stimulus from major central banks. MSCI's broadest index of Asia-Pacific shares outside Japan rose 1 per cent, recovering from a sharp fall last Friday. Japan's Nikkei climbed 1.8 per cent to its highest level of the year so far, while Australia's main index rose 0.7 per cent. Shanghai blue chips bounced 1.6 per cent. But E-Mini futures for the S&P 500 were flat as the trade was thinned by a holiday in US markets. The Dow and the Nasdaq had boasted their eighth consecutive weekly gains on wagers the United States and China would hammer out an agreement resolving their protracted trade war. The two sides will resume negotiations this week, with US President Donald Trump saying he may extend a March 1 deadline for a deal. Both reported progress in five days of talks in Beijing last week. "That does not rule out a setback or two between now and the start of March," said analysts at CBA in a note. "Even so, we still think that both sides have good reasons to want to get to an agreement. And, so motivated, it makes an agreement more likely than not." There are also growing expectations of more reflationary policies from some of the world's more powerful central banks. The need for stimulus was highlighted on Monday by data showing a sharp slide in Singapore exports and a big drop in foreign orders for Japanese machinery goods. Beijing is already taking action with China's banks making the newest loans on record in January in an attempt to jumpstart sluggish investment. Minutes of the Federal Reserve's last policy meeting are due on Wednesday and should provide more guidance on the likelihood or not for rate hikes this year. There is also talk the bank will keep a much larger balance sheet than previously planned. "Given the range of speakers since the January meeting who support "patience," the Fed minutes should reiterate a dovish message overall," said analysts at TD Securities in a note. A roll call of Fed officials is speaking at various events this week including a round table on Friday covering the future of its balance sheet. EYEING THE ECB The European Central Bank's Olli Rehn told a German newspaper on Sunday that recent data point to a weakening eurozone economy and interest rates would remain at the current level until monetary policy goals have been met. That came amid much speculation the ECB would launch another round of Targeted Long-Term Refinancing Operations (TLTRO) to support bank lending. The risk of an easy ECB saw the euro touch a three-month low on Friday before bouncing on dovish comments from Fed officials. The single currency edged up to $1.1309 but was still within the $1.1213/1.1570 trading range that has held since mid-October. The dollar was steady on the yen at 110.53, having backed away from a two-month top of 111.12. Sterling was a shade firmer at $1.2909 ahead of Brexit talks between British Prime Minister Theresa May and European Commission President Jean-Claude Juncker this week. All of which left the dollar at 96.811 on a basket of currencies, inching away from last week's top of 97.368. In commodity markets, spot gold firmed 0.28 per cent to $1,324.70 per ounce. Oil prices reached their highest for the year so far, buoyed by OPEC-led supply cuts and US sanctions on Iran and Venezuela. US crude was last up 36 cents at $55.95 a barrel, while Brent crude futures rose 20 cents to $66.45.

Asia markets dare to hope on trade talks, stimulus

Gold prices held steady on Tuesday as investors kept a cautious stance ahead of a fresh round of<a href="http://13.232.42.114/world/big-differences-remain-but-certain-deals-reached-in-china-us-trade-talks-134752"> Sino-US trade talks</a>, while a firmer dollar capped gains for the bullion, which was drawing support from global economic slowdown worries.

Spot gold was firm at $1,308 per ounce, as of 0341 GMT, after falling 0.4 per cent in the previous session.

US gold futures were also mostly unchanged at $1,312.20 per ounce.

"Gold is being pushed around by the US dollar in the near term. Traders are getting out of anything to do with Europe on concerns of weakness in the region and going for safe-haven buying into US treasuries, which is pushing up the dollar," said Kyle Rodda, market analyst, IG Markets.

When investors buy US Treasury bonds, they are also required to purchase the greenback, which makes dollar-denominated gold more expensive for holders of other currencies, potentially subduing demand.

"Gold is still very resilient and should trade in the range of $1,305 to $1,320, with investors looking for headlines around trade talks, US government shutdown and data from the United States and China for signs of weakness in the economy," Rodda said.

The new round of<a href="http://www.wionews.com/world/us-china-trade-talks-resume-next-week-focus-on-intellectual-property-196249"> trade talks between China and the United States</a> started in Beijing on Monday with world's two largest economies trying to hammer out a deal before a March 1 deadline, after which US tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 per cent from 10 per cent.

Sino-US trade tensions have rattled financial markets since last year and also underpinned the dollar's safe-haven appeal.

The dollar index was steady at 97.05, after advancing 0.4 per cent in the previous session in its largest percentage gain since Jan. 24.

"Ongoing trade tensions and concerns about weaker global economic growth continue to provide a level of support in the gold market," ANZ analysts said in a research note.

Meanwhile, US congressional negotiators said late on Monday they had reached a tentative deal on border security funding that would avert another partial government shutdown due to start on Saturday, but provided no details.

Investors are worried about the economic impact of the US government shutdown when global growth is already lean.

Among other metals, palladium traded steady at $1,385 per ounce, while silver inched up 0.1 per cent to $15.67.

Platinum rose 0.5 per cent to $785.50 per ounce. In the previous session, the metal touched $779.50, its lowest since January 2.

Gold prices held steady on Tuesday as investors kept a cautious stance ahead of a fresh round of Sino-US trade talks, while a firmer dollar capped gains for the bullion, which was drawing support from global economic slowdown worries.

Gold prices held steady on Tuesday as investors kept a cautious stance ahead of a fresh round of Sino-US trade talks, while a firmer dollar capped gains for the bullion, which was drawing support from global economic slowdown worries. Spot gold was firm at $1,308 per ounce, as of 0341 GMT, after falling 0.4 per cent in the previous session. US gold futures were also mostly unchanged at $1,312.20 per ounce. "Gold is being pushed around by the US dollar in the near term. Traders are getting out of anything to do with Europe on concerns of weakness in the region and going for safe-haven buying into US treasuries, which is pushing up the dollar," said Kyle Rodda, market analyst, IG Markets. When investors buy US Treasury bonds, they are also required to purchase the greenback, which makes dollar-denominated gold more expensive for holders of other currencies, potentially subduing demand. "Gold is still very resilient and should trade in the range of $1,305 to $1,320, with investors looking for headlines around trade talks, US government shutdown and data from the United States and China for signs of weakness in the economy," Rodda said. The new round of trade talks between China and the United States started in Beijing on Monday with world's two largest economies trying to hammer out a deal before a March 1 deadline, after which US tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 per cent from 10 per cent. Sino-US trade tensions have rattled financial markets since last year and also underpinned the dollar's safe-haven appeal. The dollar index was steady at 97.05, after advancing 0.4 per cent in the previous session in its largest percentage gain since Jan. 24. "Ongoing trade tensions and concerns about weaker global economic growth continue to provide a level of support in the gold market," ANZ analysts said in a research note. Meanwhile, US congressional negotiators said late on Monday they had reached a tentative deal on border security funding that would avert another partial government shutdown due to start on Saturday, but provided no details. Investors are worried about the economic impact of the US government shutdown when global growth is already lean. Among other metals, palladium traded steady at $1,385 per ounce, while silver inched up 0.1 per cent to $15.67. Platinum rose 0.5 per cent to $785.50 per ounce. In the previous session, the metal touched $779.50, its lowest since January 2.

Gold steady as firmer dollar offsets growth concerns

Asian shares barely budged on Tuesday with investors looking to a new round of Sino-US trade talks as the world's two largest economies try to resolve a tariff dispute that has put a dent on global growth and corporate earnings.

MSCI's broadest index of Asia-Pacific shares outside Japan was unchanged in early trade. Japan's Nikkei was up 1.1 per cent after a market holiday on Monday.

US and Chinese officials expressed hopes on Monday that a new round of talks would bring them closer to easing their months-long trade war.

Beijing and Washington are trying to hammer out a deal before a March 1 deadline, without which US&nbsp;tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 per cent from 10 per cent.

"There will be no winner in a trade war. So at some point, they will likely strike a deal," said Mutsumi Kagawa, chief global strategist at Rakuten Securities.

The trade dispute has already started to impact global growth, hitting businesses confidence, factory activity and disrupting supply chains. The worry is that a protracted Sino-US tariff row could severely hurt corporate earnings globally.

Analysts are now expecting US corporate earnings for the current quarter to drop 0.2 per cent from last year, which would mark the first contraction since the second quarter of 2016.

In the currency market, the dollar held firm, has gained for eight straight sessions against a basket of six major currencies until Monday, its longest rally in two years.

Although the Federal Reserve's dovish turn dented the dollar earlier this year, some analysts noted the US currency still has the highest yield among major peers and that the Fed continues to shrink its balance sheet.

"We see the dollar's strength essentially stemming from the Fed's balance sheet reduction," said Makoto Noji, chief currency and foreign bond strategist at SMBC Nikko Securities.

Growing evidence of a loss of momentum in the global economy has also lifted the US currency, most recently led by the European Commission's downgrade of growth in Europe, making the dollar a better investment option by default.

The dollar's index rose to its highest levels in almost three months to 971.123 on Monday. It last stood at 97.062.

In contrast, the euro dropped to as low as $1.1267 on Monday, its weakest in 2-1/2 months, and last stood at $1.1278.

The dollar popped up to a six-week high of 110.51 yen.

While the dollar drew support from the relative strength of the US economy, its near-term direction hinges on the congressional negotiation on government spending.

A Democratic Senator said on Monday negotiators were working into the night in hopes of striking a deal on funding border security programs through September 30 and averting another round of federal agency shutdowns.

The talks resumed on Monday after having broken down over the weekend.

Oil prices ticked up slightly after falls on Monday as traders weigh support from OPEC-led supply restraint and a slowdown in the global economy.

US crude futures traded at $52.55 per barrel, up 0.27 percent.

Asian shares barely budged on Tuesday with investors looking to a new round of Sino-US trade talks as the world's two largest economies try to resolve a tariff dispute that has put a dent on global growth and corporate earnings.

Asian shares barely budged on Tuesday with investors looking to a new round of Sino-US trade talks as the world's two largest economies try to resolve a tariff dispute that has put a dent on global growth and corporate earnings. MSCI's broadest index of Asia-Pacific shares outside Japan was unchanged in early trade. Japan's Nikkei was up 1.1 per cent after a market holiday on Monday. US and Chinese officials expressed hopes on Monday that a new round of talks would bring them closer to easing their months-long trade war. Beijing and Washington are trying to hammer out a deal before a March 1 deadline, without which US tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 per cent from 10 per cent. "There will be no winner in a trade war. So at some point, they will likely strike a deal," said Mutsumi Kagawa, chief global strategist at Rakuten Securities. The trade dispute has already started to impact global growth, hitting businesses confidence, factory activity and disrupting supply chains. The worry is that a protracted Sino-US tariff row could severely hurt corporate earnings globally. Analysts are now expecting US corporate earnings for the current quarter to drop 0.2 per cent from last year, which would mark the first contraction since the second quarter of 2016. In the currency market, the dollar held firm, has gained for eight straight sessions against a basket of six major currencies until Monday, its longest rally in two years. Although the Federal Reserve's dovish turn dented the dollar earlier this year, some analysts noted the US currency still has the highest yield among major peers and that the Fed continues to shrink its balance sheet. "We see the dollar's strength essentially stemming from the Fed's balance sheet reduction," said Makoto Noji, chief currency and foreign bond strategist at SMBC Nikko Securities. Growing evidence of a loss of momentum in the global economy has also lifted the US currency, most recently led by the European Commission's downgrade of growth in Europe, making the dollar a better investment option by default. The dollar's index rose to its highest levels in almost three months to 971.123 on Monday. It last stood at 97.062. In contrast, the euro dropped to as low as $1.1267 on Monday, its weakest in 2-1/2 months, and last stood at $1.1278. The dollar popped up to a six-week high of 110.51 yen. While the dollar drew support from the relative strength of the US economy, its near-term direction hinges on the congressional negotiation on government spending. A Democratic Senator said on Monday negotiators were working into the night in hopes of striking a deal on funding border security programs through September 30 and averting another round of federal agency shutdowns. The talks resumed on Monday after having broken down over the weekend. Oil prices ticked up slightly after falls on Monday as traders weigh support from OPEC-led supply restraint and a slowdown in the global economy. US crude futures traded at $52.55 per barrel, up 0.27 percent.

Asian stocks subdued, focus on new round of Sino-US talks