By Kevin Buckland
TOKYO (Reuters) – The global markets witnessed a downturn as trade tensions continue to rise, with Wall Street futures falling and safe-haven currencies like the yen and Swiss franc strengthening early on Monday. Concerns over deflationary pressures in China, coupled with fears of a slowing U.S. economy and an intensifying global trade conflict, have contributed to the market turmoil.
U.S. S&P 500 stock futures were down by 0.5% and Nasdaq futures dropped by 0.6% as of 0137 GMT. In Asia, Hong Kong’s Hang Seng index slipped by 0.1%, alongside a decline in mainland Chinese blue chips. Taiwan’s equity benchmark also fell by 0.4%, while Japan’s Nikkei managed a slight 0.2% gain after fluctuating between minor gains and losses.
The yen saw a 0.6% increase to 147.245 per dollar, while the Swiss franc rose by 0.4% to 0.8773 per dollar. Recent data revealed that China’s consumer price index experienced its sharpest decline in 13 months in February, with producer price deflation extending for the 30th consecutive month. To counter these trends, Beijing announced plans for additional stimulus to bolster consumption and promote innovation in artificial intelligence, coinciding with the week-long National People’s Congress meetings.
In the U.S., President Donald Trump, in a Fox News interview on Sunday, refrained from predicting whether his tariffs on China, Canada, and Mexico would lead to a U.S. recession. This uncertainty was compounded by weaker-than-expected job creation figures in the latest payrolls report. Analysts suggest that Trump’s economic policies are contributing to market anxiety, as his focus on long-term structural changes may impact short-term growth.
Market reactions included a drop in U.S. Treasury yields, with the 10-year yield declining by as much as 6 basis points to 4.257% and the two-year yield falling by 4.5 basis points to 3.956%. The U.S. dollar index, which measures the currency against major peers, edged down by 0.1% to 103.59. The euro and sterling both saw modest gains against the dollar.
Trump’s statements on potential tariffs on Canadian goods and sanctions on Russian banks added to market uncertainties. These geopolitical tensions have also influenced commodity prices, with crude oil and gold experiencing fluctuations. Cryptocurrency bitcoin registered a significant drop, reaching its lowest point this month after hitting an all-time high in January.
Overall, market sentiment remains cautious as investors navigate through a complex landscape of economic indicators and geopolitical developments.
