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  • Asian traders struggle to keep the recent gains as market sentiment weakens off late.
  • Trade-positive headlines from the US and China joined Beijing’s upbeat data to favor risk-off earlier.
  • No-deal Brexit risks firm up as the UK’s House of Commons remove barriers to stop the Internal Market Bill.

Asian shares trade mixed as fears of hard Brexit joined Sino-American trade headlines and China’s August month data dump. While portraying the mood, the MSCI index of Asia-Pacific shares outside Japan rises 0.60% but Japan’s Nikkei 225 drops around 0.50% ahead of Tuesday’s European session.

The US State Department’s easing of travel warnings towards China and Hong Kong joins Beijing’s extension of tariff relief to the American goods’ imports to favor the market’s risk-on sentiment. Also on the positive side could be news from the Global Times suggesting the Chinese will get the coronavirus (COVID-19) vaccine in November. Earlier, the Pfizer signaled that the US customers will have a cure to the pandemic by this year’s end.

Also on the positive side were China’s Industrial Production and Retail Sales data that beat forecasts in August.

On the contrary, the UK’s House of Commons rejected the opposition Labour Party backed motion to block the Internal Market Bill (IMB). The same strengthens UK PM Boris Johnson’s move towards pushing the European Union (EU) to accept their trade terms, which in turn increases the odds of a no-deal Brexit.

Furthermore, uncertainty surrounding the American stimulus and the US-China trade tussle keep the market players worried ahead of the key Fed meeting, up for Wednesday.

Against this backdrop, S&P 500 Futures trim early gains to near 0.20% whereas the US 10-year Treasury yields stay unchanged around 0.669%. Further, stocks in Australia and New Zealand are modestly weak whereas those from China and Hong Kong print mild gains by the press time.

South Korea’s Kospi and India’s BSE Sensex are down almost 0.50% while Indonesia’s IDX Composite fails to cheer upbeat Indonesian Trade Balance data and losses over 1.0% as we write.

Moving on, traders will keep eyes on the risk catalysts ahead of the US session whereas the NY Empire State Manufacturing Index will be the key to observe. Overall, the market’s pre-Fed cautious sentiment can question any major moves.