· U.S. stock futures and commodity prices slipped while bonds rallied on Monday on worries an intensifying Sino-U.S. trade tussle and Washington’s new tariff threats against Mexico could tip the global economy into a recession.

The E-mini futures for S&P500 dropped 0.5% in Asian trade to 2,738, near their March low of 2,722 while Japan’s Nikkei skidded 1.1% to a four-month low.

Ex-Japan Asia fared better as gains in South Korea and India offset weakness elsewhere, with MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.35%.

The gloomy economic outlook has prompted traders to increase bets that the U.S. Federal Reserve will cut interest rates sooner rather than later.

Fed funds rate futures are now almost fully pricing in two rate cuts this year, one by September, with more than 50 percent chance of a move by July 30-31.

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· European stocks traded lower on Monday morning, as fears over the current state of global trade intensified, causing international markets to stumble.

The pan-European Stoxx 600 dropped 0.6% in early trade. Oil and gas stocks took the biggest hit, falling 1.3% while only the food and beverages sector entered positive territory.

Stock markets will be keeping an eye on trade relations and what it means for the global economy. On Monday, Asia-Pacific markets were showing a mixed-to-negative picture, as traders digested fresh data and reacted to Wall Street’s volatile session on Friday.




· Japanese stocks hit the skids on Monday as investors fretted about the rising risks to global and domestic growth from a potentially protracted and widening tariff war between the United States and its major trading partners.

The Nikkei share average ended 0.9% lower at 20,410.88, the weakest closing level since Feb. 9. In intraday trade, it slumped 1.4% to hit a 4-1/2 month low of 20,305.74.

“Investors’ main concern is that the trade war may hurt global growth,” said Toru Ibayashi, executive director of wealth management at UBS Securities, Japan, adding that the Nikkei could fall further.



· Shanghai stocks ended the first session of the month on a bearish note on concerns that escalating trade tensions could increase risks of a global slowdown, and as investors were worried Beijing’s stimulus measures might impact liquidity.

The blue-chip CSI300 index ended up 0.1% at 3,632.01 on Monday, while the Shanghai Composite Index closed 0.3% weaker at 2,890.08 points.



Reference: Reuters, CNBC