* MSCI Asia ex-Japan -0.3%
* European shares expected to fall
* Australian stocks rise after RBA cash rate cut
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Andrew Galbraith
SHANGHAI, June 4 (Reuters) - Asian shares fell on Tuesday as
weak economic indicators and an intensifying Sino-U.S. trade war
inflamed concerns about global growth, supporting safe-haven
assets such as bonds.
European equities are also expected to fall. In early
European trade, pan-region Euro Stoxx 50 futures STXEc1 were
down 0.36% at 3,279, German DAX futures FDXc1 fell 0.31% to
11,745, FTSE futures FFIc1 eased 0.27% to 7,155.5, and
France's CAC 40 futures FCEc1 lost 0.53% to 5,193.
Investor focus has shifted to monetary policy this week with
Australia's central bank cutting its cash rate to a record low
on Tuesday, and India tipped to ease on Thursday.
Comments from the Federal Reserve on Monday, meanwhile,
raised expectations the U.S. central bank is moving closer to a
rate cut, as did a closely watched U.S. factory survey.
"Unless there's a circuit breaker, and it may come in terms
of a Fed cut, or it may come in terms of more Chinese stimulus
or the European Central Bank later this week...equity prices and
bond rates are going to continue to go lower," said Greg
McKenna, strategist at McKenna Macro.
The ECB holds its next policy meeting on Thursday and is
expected to keep settings unchanged though there is growing
speculation it could shift to a more dovish footing.
Losses across Asian equity markets on Tuesday followed falls
on Wall Street overnight that saw the Nasdaq drop into
correction territory. MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS was down 0.3%, after
earlier rising as much as 0.18%.
The broad index was pulled lower by Chinese shares. China's
blue-chip CSI300 index .CSI300 was 0.94% lower, and the Hang
Seng .HSI lost 0.66%.
Defying the regional selloff, Australian shares .AXJO
finished 0.19% higher, boosted by the Reserve Bank of
Australia's decision to cut its cash rate to 1.25%, a record
low, in what could be the first in a series of stimulus
measures. Japan's Nikkei .N225 ended flat after a rocky session.
Underscoring slowdown concerns, a factory survey on Monday
showed U.S. manufacturing growth eased in May to its weakest
pace in more than two-and-a-half years, defying expectations for
a modest rebound.
Hostile rhetoric between the United States and China
continued on Monday as Washington accused Chinese negotiators of
backpedalling on important elements of a trade deal that had
been largely agreed by both sides. Adding to broader investor worries are fears that U.S.
antitrust regulators could target Alphabet, Facebook, Apple and
Amazon. News of U.S. government plans to investigate the tech giants
dragged down tech shares on Monday, driving the Nasdaq .IXIC
1.61% lower to 7,333.02. The drop took the index more than 10%
lower than its May 3 closing record.
The S&P 500 .SPX lost 0.28% to 2,744.45 and the Dow Jones
Industrial Average .DJI eked out a 0.02% gain to 24,819.78.
BULLARD COMMENTS
U.S. Treasury yields rose slightly on Tuesday but remained
near recent lows. U.S. 10-year notes yielded 2.0882%, up from a
U.S. close of 2.081%, having touched its lowest level since
September 2017 on Monday.
The two-year yield US2YT=RR rose to 1.8653% compared with
a U.S. close of 1.84%.
The fall in the two-year yield reflects raised expectations
of a more accommodative Fed.
St. Louis Fed president James Bullard on Monday said a rate
cut "may be warranted soon" given risks to global growth posed
by trade tensions and weak U.S. inflation. Gold XAU= was up 0.12% at $1,326.47 per ounce, near
three-month highs, and Japan's yen strengthened, with the dollar
dropping 0.18% against the Asian safe-haven to 107.87. JPY=
GOL/
"Risk aversion has also been seen with the yen carry trade
unwinding as the markets comprehend that the U.S. technology
containment strategy towards China is unlikely to reverse,"
analysts at Jefferies said in a note.
"In the short term, positioning has become so bearish that
'a ceasefire' could spark a risk rally."
The euro EUR= was 0.14% stronger at $1.1257, while the
dollar index .DXY , which tracks the greenback against a basket
of six major rivals, was barely changed at 97.134.
Crude prices whipsawed, resuming their declines after a
brief bounce, on mounting trade worries.
U.S. crude CLc1 was down 0.43% at $53.02 a barrel and
Brent crude LCOc1 dropped 0.59% to $60.92 per barrel.
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Record low RBA cash rate https://tmsnrt.rs/2QFJt4n
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