SHANGHAI (Dec 4): Asian shares fell in early trade on Tuesday as a relief rally sparked by a truce in the U.S.-China trade war gave way to doubts on whether the two countries are able to resolve their differences before a 90-day deadline.MSCI's broadest index…
The temporary freeze on further hostilities in the trade war between the United States and China had sparked a global rally in equity markets on Monday, pushing MSCI's all-country world index up 1.3 percent.
Adding to worries over the outlook for the global economy, the yield curve between U.S. three-year and five-year notes, and between two-year and five-year paper inverted on Monday - the first parts of the Treasury yield curve to invert since the financial crisis, excluding very short-dated debt.
Early in Asian trade, the yield on benchmark 10-year Treasury notes fell to 2.9661 percent compared with its U.S. close of 2.991 percent on Monday.
"The fear across global markets is that this is just a short term relief rally and we will find ourselves back where we were a few weeks ago and staring down the barrel of a long term global growth slow down," Nick Twidale, Sydney-based analyst at Rakuten Securities Australia said in a note.
In contrast to the retreat in equity markets, oil prices continued to rise on Tuesday after surging 4 percent the day before on the U.S.-China trade truce, and ahead of a key OPEC meeting that is expected to lead to supply cuts.