Asian stocks trade mixed as US and Mexico talks fail

• Major Asian indices are trading mixed on fears the US may immpose tariffs on Mexico. 
• Markets expect central banks to chip in if trade tensions hurt global econnomy. 

Asian stocks are trading mixed this Thursday morning amid lingering trade tensions. 

At press time, Japan’s Nikkei is reporting a 0.30% gain, while the Shanghai Composite is down 0.40%. Stocks in Australia and New Zealand are flashing green while those in South Korea and Hong Kong are trading largely unchanged on the day. 

The risk sentiment has soured possibly due to reports stating that the US and Mexico failed to reach a deal immigration issues during their Wednesday meeting.

The talks are set to continue today. However, if agreement remains elusive, then the US will start imposing 5% tariffs on Mexican goods from Monday. 

Escalation of tensions with Mexico could only bolster fears of global recession triggered by the US-China trade war. 

Hence, its not surprising to see that the futures on the S&P 500 are currently trading flat-to-negative. The US equities registered gains on Wednesday on speculation the Fed would cut rates if the escalating trade tensions have a negative impact on the economy. 

The markets are expecting the Fed to cut rates by 25 basis points in September this year, according to the Fed funds futures. 

The central bank, however, may refrain from easing if the stock market continues to hold up well.