U.S. stock futures tumble on report of no progress in Sino-U.S. talks

U.S. stock futures tumble on report of no progress in Sino-U.S. talks

TOKYO (Reuters) – U.S. stock futures tumbled and the safe haven yen and the Swiss franc gained in early Asian trade on Thursday after a media report that the United States and China had made no progress in deputy-level trade talks earlier in the week.

FILE PHOTO: A man is reflected on a stock quotation board outside a brokerage in Tokyo, Japan, August 5, 2019. REUTERS/Issei Kato

The South China Morning Post also said the Chinese delegation, headed by Vice Premier Liu He, is planning to leave Washington on Thursday after just one day of minister-level meetings, instead of an originally planned departure set for Friday.

S&P500 mini futures slumped 1.1% and Chicago-traded futures imply a fall of 0.4% for Japan’s Nikkei.

In the currency market, the yen advanced 0.3% to 107.11 to the dollar while the Swiss franc also gained 0.3% to 0.9929 franc per dollar.

The Chinese yuan dropped 0.4% in offshore trade to 7.1685 per dollar, touching its lowest level in five weeks.

The report on the U.S.-China trade talks came less than a couple of hours after U.S. President Donald Trump told reporters he thinks China wants to make a trade deal more than he does.

Chinese government officials told Reuters that Beijing has lowered expectations for significant progress from this week’s trade talks with the United States, upset by the blacklisting of Chinese companies.

Top negotiators from the two countries — Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin — were scheduled to meet in Washington on Thursday and Friday to try to end a bruising 15-month-old trade war.

Without significant progress, Trump is set to hike the tariff rate on $250 billion worth of Chinese goods to 30% from 25% next Tuesday.

Before the media report on the lack of progress in the trade talks, share prices had gained on Wednesday, with the S&P 500 rising 0.91% on hopes of a possible compromise between the world’s two biggest economies.

Editing by Shri Navaratnam

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