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Asian shares started the week on the back foot on Monday as worries about global growth, U.S.politics and the ongoing Sino-U.S. tariff war kept investors cautious, while the safe-haven greenback held near a six-week top against major currencies.

MSCI’s broadest index of Asia-Pacific shares outside Japan was a tad weaker after it was toppled from a four-month top on Friday.

Trading volumes are expected to be thin with Japan on public holiday, while Chinese markets reopen after a week-long break for the Lunar New Year holiday.

World stocks ended last week in the red amid uncertainty about global economic growth and trade tensions, posting their first weekly drop this year.

Still, Wall Street’s main equity indexes recouped losses late on Friday, with the benchmark S&P 500 ending marginally positive and the Nasdaq adding 0.14 per cent. The Dow Jones Industrial Average fell 0.25 per cent.

Investors are looking ahead to trade talks this week with a delegation of U.S. officials travelling to China for the next round of negotiations.

Of recent concern to markets was the collapse in talks between U.S. Democrat and Republican lawmakers over the weekend amid a clash over immigrant detention policy, raising fears of another government shutdown.

That development comes in the wake of other news headlines that markets have had to process since late last week. These include a sharp downgrade to euro zone growth this year and next and U.S. President Donald Trump’s declaration that he had no plans to meet with Chinese President Xi Jinping before a March 1 deadline to achieve a trade deal.

“Growth is probably the big area of risk – the U.S. is still on a healthy track but China stabilization is more hope than reality at the moment while European momentum continues to soften,” JPMorgan analysts said in a note.

“Investors have plenty to be nervous about, including the ongoing growth softness in Europe and the risk this drags the other major geographies down with it,” they added.

“But U.S. trade policies shouldn’t be high on the list,trade rhetoric will stay a problem though.”

Markets will closely watch earnings from major U.S.companies including Coca-Cola Co, PepsiCo Inc,Walmart Inc, Home Depot Inc, Macy’s Inc and Gap Inc for further clues about the health of the consumer sector.

Analysts now expect first-quarter earnings for S&P 500 companies to decline 0.1 per cent from a year earlier, which would be the first such quarterly profit decline since 2016, according to IBES data from Refinitiv.

In currency markets, the dollar held near a six-week high around 96.665 against a basket of currencies, and had its strongest weekly gain in six months, as traders piled into the greenback in a safe-haven move.

The euro was slightly weaker at $1.1321 while sterling down 0.1 per cent at $1.2933.

The Australian dollar hovered near one-month lows after the country’s central bank shifted away from a previous tightening bias to say rates could now go in either direction.

The Aussie was last at $0.7092 after going as deep as$0.7060 on Friday.

Oil prices held near recent ranges with gains capped by concerns about slowing global demand.

U.S. crude was 13 cents weaker in early Asia at $52.57 per barrel while Brent had settled at $62.06 on Friday.

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