Asian Stocks Dip On Report China Will Ask WTO for Permission to Impose Tariffs on US

The major indexes in Asia are under pressure on Wednesday, failing to follow Wall Street’s higher lead from the previous session. Stocks are being pressured overnight on the back of the news that China will be making a request to the World Trade Organization (WTO) to impose sanctions on the U.S.

This news comes in the wake of threats of additional tariffs on China from the United States. Last Friday, President Trump announced that he was prepared to slap more tariffs on $267 billion of Chinese imports into America if he desired.

On Tuesday, China said it would approach the WTO next week to request permission to impose sanctions on the U.S. The meeting is scheduled to take place on September 21.

At 0249 GMT, Japan’s NIKKEI 225 Index is trading 22565.33, down 99.46 or -0.44%. Australia’s S&P/ASX 200 Index is at 6177.70, down 2.00 or -0.03% and China’s Shanghai Index is trading 2660.76, down 4.04 or -0.15%.

Early in the U.S. pre-market session, September E-mini S&P 500 Index futures are trading 2887.25, down 2.50 or -0.08%. September E-mini NASDAQ-100 Index futures is at 7507.50, down 4.50 or -0.06% and September E-mini Dow Jones Industrial Average futures are trading 25987, down 15 or -0.06%.

U.S. Treasury Markets

The highlight of Tuesday’s session was another jump in the yield on the benchmark U.S. two-year note, which hit its highest level since 2008 amid signs of a stronger economy and a slew of inflation data later this week.

The two-year yield hit 2.744 percent for the first time since July 2008. The yield on the benchmark 10-year Treasury note was higher at 2.974 percent, while the yield on the 30-year Treasury bond was up at 3.117 percent.

In other news, the U.S. Treasury Department auctioned $35 billion in three-year notes at a high yield of 2.821 percent. Other details showed the bid-to-cover ratio at 2.68. This is an indicator of demand. Indirect bidders, which include major central banks, were awarded 46.3 percent. Direct bidders, or domestic money managers, bought 10.7 percent.

Forex

The U.S. Dollar plunged on Tuesday against the Canadian Dollar after Canada signaled it was ready to make a concession to the United States to resolve their talks over reworking NAFTA.

According to reports, two Canadian sources with direct knowledge of Ottawa’s negotiating strategy said overnight Ottawa was ready to offer the United States limited access to the Canadian dairy market as a concession in negotiations to remake the NAFTA deal. Canada’s protected daily industry is a sticking point in NAFTA talks between the two countries.

The Australian Dollar, a proxy for global growth due to the nation’s significant trade exposure to China, is trading near a 2 ½-year low early Wednesday amid concerns Australia’s exporters could suffer from any damage to the Chinese economy from a trade war.