Asian stocks are mixed despite the stronger close for US equities, as markets limp towards the weekend. The recent flare-up in US-China tensions continues to weigh on the collective mind, as investors hunker down for what is feared to be a long, drawn-out dispute between the world’s two economic powerhouses.

At this point in time, it’s hard to see either the US or China having enough will to resolve their differences, much less before the new US tariffs on Chinese goods kick in on September 1. Should the barriers to global trade be raised next month, that would be another kick in the gut for risk appetite and may prompt another selloff in risk assets.

Gold garners more suitors, given scarcity of viable alternatives

Gold is a clear winner from the elevated concerns surrounding the global economy, with Bullion remaining above the psychologically important $1500 level, near its highest levels since 2013. Gold is garnering more and more suitors as investors have scarce viable alternatives in a global landscape that’s plagued by risk aversion. Although some segments of the market will test every opportunity to wade further out into risk-on territory, the long shadow cast by the ongoing US-China conflict should ensure that Gold can hang on to most of its 2019 gains, with the $1450 level serving as the stronger support level below $1500.

Euro’s August gains may prove fleeting

The Euro has managed to drag itself back up by 1.1 percent against the US dollar so far this month, with EURUSD hovering mostly around 1.12 in recent days. However, such gains may prove fleeting, as rising political tensions in Italy threaten to exacerbate the Euro’s outlook.

Political turmoil in Italy would add another layer of risk to the Euro, with investors already contending with the ill-effects from Brexit uncertainties as well as the protracted US-China trade conflict. Should the Federal Reserve pour cold water on markets that are clamoring for more US interest rate cuts over the course of the year, any Dollar resurgence is set to cost the Euro, with scant upside catalysts evident for the bloc’s currency in the immediate future.

Brent wallows in bear market, bogged down by demand-side uncertainties

Having fallen into a bear market, Brent futures are struggling to create a sustained lift-off from its 7-month lows, currently trading around $57/bbl. With the US-China standoff still a drag on global demand for Oil, investors are questioning what else OPEC+ producers can do to stem the price declines.

Despite the pledged supply cuts by OPEC+ through March 2020, major Oil producers may be called into action again soon with more supply cuts. Even then, with US shale output still resilient, coupled with the demand-side erosion due to the heightened barriers to global trade, it’s getting tougher for Oil to swim against the bearish tide. Present market forces only serve to reinforce the notion that Oil prices will remain at the mercy of the protracted US-China conflict.