China remains largest foreign holder of US Treasuries

Wall Street hammered by China's plan to retaliate on trade

Stocks Sell-Off to Hit Asia as China Strikes Back: Markets Wrap

The latest data on China's US bond holding were collected before a sudden breakdown in trade talks between the world's two biggest economic powers 1-1/2 weeks ago and prior to the USA duty hike on Chinese goods, which went into effect on Friday.

Trade rattled financial markets again, with stocks sinking for the fifth time in six sessions since China's defiance of Trump's warning not to retaliate for his imposition of higher tariffs Friday escalated the skirmish, driving demand for havens from gold to the yen while punishing risk assets. Hong Kong equities fell more than 1% as the market re-opened after a holiday.

The yuan's advance came after a front-page article in a newspaper backed by the People's Bank of China cited analysts saying that the currency won't weaken continuously or by a large amount.

In March, China's Treasury holdings fell by $10.4 billion to $1.12 trillion, the lowest level since May 2017, according to Treasury Department data released Wednesday. "That's positive - global growth and global trade shouldn't suffer too much - but we're likely to still be in a period where we are going to get headline volatility that relates to the compliance" after any deal, he said. Meanwhile, investors are pricing in a Federal Reserve interest-rate cut this year as a near certainty.

Elsewhere, oil stabilized around $61 a barrel after climbing earlier on concerns about rising tensions in the Persian Gulf.

Earnings this week include Vodafone, Alibaba, Tencent, Cisco, Nvidia.New York Fed President John Williams speaks at an event in Zurich.

Both the Dow Jones Industrial Average and the S&P 500 index fell by more than 2 percent in early trading on Monday, while the Nasdaq Composite index had lost nearly 3 percent of its value by 11 a.m. ET. Kansas City Fed President Esther George and Richmond Fed President Thomas Barkin also make appearances.China industrial production and retail sales are slated for Wednesday, same day as US retail sales and industrial production.Bank of Indonesia has an interest rate decision on Thursday.Australian unemployment is out on Thursday. The S&P 500 was down 69.53 points, or 2.41 percent, to 2,811.87. The Bloomberg Dollar Spot Index rose 0.1%.

The West Texas Intermediate for June delivery was down 0.62 USA dollar to settle at 61.04 dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery fell 0.39 dollar to close at 70.23 dollars a barrel on the London ICE Futures Exchange.

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