* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Most Asian stock markets ease, along with S&P futures
* Brent licks wounds after suffering sharpest drop in 7 wks
* U.S. Treasury yields fall further, flatten curve
* Next major event is minutes of Fed's last meeting
By Wayne Cole
SYDNEY, Nov 20 (Reuters) - Asian shares lost out to
safe-harbour bonds on Wednesday as Sino-U.S. trade talks
produced nothing but white noise, while concerns about a supply
glut left oil prices nursing their biggest one-day loss in seven
weeks.
Figures from the American Petroleum Institute out late
Tuesday showed a far larger rise in crude stocks than expected.
That followed reports Russia was unlikely to deepen its cuts to
crude output. Brent crude LCOc1 futures eased another 10 cents to $60.81
a barrel, after sliding 2.6% overnight, while U.S. crude CLc1
dipped 2 cents to $55.19.
The mood in share markets was sombre with MSCI's broadest
index of Asia-Pacific shares outside Japan .MIAPJ0000PUS off
0.7%. Japan's Nikkei .N225 fell 0.8% and Shanghai blue chips
.CSI300 0.5%.
Australia's main index .AXJO sank 1.3% led by the banks
after the country's financial crime regulator alleged Westpac
had breached laws on over 23 million instances and applied for
civil penalties against the lender. E-Mini futures for the S&P 500 ESc1 shed 0.2% and
EUROSTOXX 50 futures STXEc1 0.2%.
The prospects for progress on trade dimmed when China
condemned a U.S. Senate measure on Hong Kong, vowing to take the
steps necessary to safeguard its sovereignty and security.
The Senate unanimously passed legislation aimed at
protecting human rights in Hong Kong. Late Tuesday, U.S. President Donald Trump had threatened to
raise tariffs further if China would not agree to a deal that he
liked. The aggressive tone unsettled Wall Street and the Dow .DJI
ended down 0.36%, while the S&P 500 .SPX lost 0.06% and the
Nasdaq .IXIC added 0.24%.
Dour forecasts from retailers Home Depot and Kohl's fuelled
worries about consumer spending, while the energy sector .SPNY
was the S&P's biggest loser as oil slid. .N
COUNTING DOWN TO FED MINUTES
"The immediate focus remains on the U.S.-China trade talks,
and markets seem reluctant to move much in either direction
until they are resolved," wrote analysts at ANZ in a note.
"It was noticeable that fixed income markets rallied despite
equity markets being stable, suggestive of a market that remains
cautious about the growth outlook."
Yields on U.S. 10-year Treasuries US10YT=RR dropped
further to a two-week trough of 1.75%, with a marked flattening
of the curve hinting at a possible return of recession fears.
The dip in yields nudged the dollar down on the safe-haven
Japanese yen and it was last at 108.47 JPY= , though still
within the 107.87 to 109.48 range of the last five weeks.
The euro held at $1.1074 EUR= but faced chart resistance
around $1.1090. The dollar was steadier on a basket of
currencies at 97.886 .DXY .
Investors now await minutes of the Federal Reserve's last
policy meeting where it cut interest rates and signalled a pause
for the time being.
"The minutes will elaborate on the Fed's view that the
downside risks to the U.S. economy have eased, and that a
'material reassessment' of the economic outlook will be needed
for it to cut rates again," said Joseph Capurso, an analyst at
Commonwealth Bank of Australia.
"We see the FOMC now on hold until March, 2020."
The market has all but given up on the prospect of an easing
in December, which is now priced at just 0.8%. A move in March
is put at a probability of around 42%. FEDWATCH
The risk-off tone left spot gold a shade firmer at $1,474.30
per ounce XAU= .
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(Editing by Stephen Coates and Sam Holmes)