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Trade fears and weather in focus

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In the trade spat between the US and China, the only certainty seems to be uncertainty, as the US sent conflicting messages over the past week about its plans to resolve the conflict.

Global markets picked up towards the end of last week when news broke last Thursday that US Treasury Secretary Steven Mnuchin had extended an invitation to Chinese officials to restart trade talks.

However, hopes for a fruitful session were undermined by US President Donald Trump's tweet later that day that the US had the upper hand in the talks and was "under no pressure to make a deal".

US markets then pared gains before closing on Friday, following a Bloomberg report that Mr Trump had instructed aides to go ahead with the next round of tariffs on US$200 billion (S$275 billion) of Chinese goods.

The Dow Jones Industrial Average rose 8.68 points, or 0.03 per cent, to 26,154.67; the S&P 500 gained 0.80 point, or 0.03 per cent, to 2,904.98; and the Nasdaq Composite dropped 3.67 points, or 0.05 per cent, to 8,010.04. For the week, the Dow was up 0.9 per cent, the S&P 500 1.2 per cent and the Nasdaq 1.4 per cent.

"The success of trade talks in the later part of September remains a question, particularly with the hard stance that President Donald Trump continues to hold despite the offer for talks," said Ms Pan Jingyi, market strategist at IG.

"The flopping of past talks in recent memory would make one cognisant of the heightened volatility we could still be seeing from the oscillating sentiment surrounding this item. With this backdrop, look to developments on the formulation of these talks to help drive the market."

Several countries are dealing with the aftermath of severe storms that hit over the weekend. Florence, a Category 1 hurricane, ripped into the US's Carolina coast on Friday, causing catastrophic floods and leaving at least 11 people dead.

Catastrophe modeller Risk Management Solutions told Bloomberg the hurricane, which was downgraded to a tropical storm, may cause US$15 billion to US$20 billion in losses for insurance companies, not including the potential cost of inland flooding. Other estimates put total cost of damages at US$27 billion.

Closer to home, Super Typhoon Mangkhut made landfall in the Philippines on Saturday with winds of up to 269 kmh, and continued on to Hong Kong and China's Guangdong coastline on Sunday.

Mr Chuck Watson, a disaster modeller at Enki Research in the US, told Bloomberg that the typhoon could cause the Philippines economic losses of 6.6 per cent of gross domestic product, or more than US$20 billion.

In China and Hong Kong, Mr Watson expects Mangkhut to cause about US$50 billion in economic losses.

In the week ahead, the US Federal Reserve has entered its blackout period ahead of its Federal Open Market Committee meeting on Sept 25 to 26. Upcoming US data include housing data and the Markit manufacturing and services Purchasing Managers' Index on Friday.

Japanese and Malaysian markets are closed for holidays today. Indian markets will close on Sept 21 for the Muharram holiday.

Key data being released this week include Singapore's non-oil domestic exports data for August and Indonesia's August trade numbers today, Australia's Q2 house prices tomorrow and Malaysia's consumer price index numbers for August on Wednesday.

Thursday's data will be New Zealand's Q2 gross domestic product numbers and Taiwan's August export orders. On Sept 21, look out for South Korea's first 20 days of trade data for September and Thailand's August customs trade data.