US jobs data will provide a clearer snapshot of the world’s top economy, which has been hit by fresh containment measures that have left cities like Las Vegas like ghost towns. ©AFP Bridget BENNETT

Hong Kong (AFP) – China-US tensions and US lawmakers’ struggles to find agreement on a new, much needed economic stimulus pushed equities down Friday morning — all against a backdrop of a surge of virus infections.

With the multi-trillion-dollar rescue package agreed earlier this year now all but gone, the bipartisanship that rushed it through has given way to the familiar Capitol Hill wrangling as Democrats and Republicans refuse to budge on key issues.

The two sides have been holding talks for more than a week on the new package but with the Democrats’ $3.5 trillion proposal more than three times the size of the Republicans’ offer, a deal appears a distant hope, despite a deadline being set for Friday.

“There are a lot of issues we are close to a compromise position on,” Treasury Secretary Steven Mnuchin said after holding talks with House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer.

However, he added they were “very, very far apart on some significant issues”, while White House Chief of Staff Mark Meadows said: “The differences are still significant.”

The sentiments were shared by Pelosi, who described the situation as “most unfortunate”.

While there is a broad expectation among traders and analysts that a deal will eventually be struck — particularly three months before an election — concerns remain.

“In an election year, it is crazy to think that politicians will take a fabulously frugal approach as penniless parenting is rampant across the nation given the services sector beatdown and loss of jobs” because of the virus, said AxiCorp’s Stephen Innes.

“Indeed, this isn’t about buying gasoline for the family sedan. This about feeding your kids!”

Donald Trump has said if an agreement is not found, he will pass an executive order covering a payroll tax cut, eviction protections, unemployment benefits and student loan repayments.

The battle in Congress comes as the country suffers a relentless rise in new virus cases, while it reported more than 2,000 deaths from the disease Thursday — the first time it has done so in three months.

– US jobs in focus –

Asian markets were in the red, despite another strong lead from Wall Street, where the tech-rich Nasdaq soared to a new record for the fourth day in a row.

Tokyo ended the morning 0.6 percent lower, while Hong Kong shed more than two percent and Shanghai slipped 1.1 percent, with Sydney 0.7 percent lower.

Taipei, Singapore, Manila, Jakarta and Wellington were also well down.

Ever-present China-US tensions were also playing on traders’ minds after Trump signed an executive order barring US residents from doing any business with the Chinese parent companies of social media platforms TikTok and WeChat, citing national security concerns.

The move, which comes into force in 45 days, is the latest salvo in a tech stand-off between the superpowers and adds to a laundry list of issues they have butted heads over in recent months, including Hong Kong, Huawei and the virus.

WeChat parent tencent sank more than four percent in Hong Kong, while the yuan also sank against the dollar.

Meanwhile, a group of regulators working for the president suggested stock exchanges impose stricter rules on firms to open up their audit papers, which could lead to the delisting of Chinese companies.

The next point of focus is the US jobs report later in the day, which will provide a clearer idea about the impact of the virus on the economy after a number of states were forced to reimpose lockdown measures to fight a fresh infection spike.

While figures Thursday showed new applications for jobless benefits began to fall again last week, the 1.2 million figure showed the economy is still struggling.

Analysts warn a worse-than-expected read on the labour data could send the dollar tumbling further, having already come under pressure in recent weeks from the Federal Reserve’s ultra-loose monetary policy and concerns about the virus spread across the country.

– Key figures around 0250 GMT –

Tokyo – Nikkei 225: DOWN 0.6 percent at 22,273.62 (break)

Hong Kong – Hang Seng: DOWN 2.6 percent at 24,293.95

Shanghai – Composite: DOWN 1.1 percent at 3,348.34

Euro/dollar: DOWN at $1.1865 from $1.1884 at 2100 GMT

Dollar/yen: UP at 105.57 yen from 105.52 yen

Pound/dollar: DOWN at $1.3126 from $1.3145

Euro/pound: UP at 90.39 pence from 90.34 pence

West Texas Intermediate: UP 0.4 percent at $42.13 per barrel

Brent North Sea crude: UP 0.3 percent at $45.23 a barrel

New York – Dow: UP 0.7 percent at 27,386.98 (close)

London – FTSE 100: DOWN 1.3 percent at 6,026.94 (close)

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.