* Global stocks slide as Sino-US trade talks deadlocked
* Bitcoin hit nine-month highs over weekend
* U.S. ready to raise tariffs on all remaining imports from China
* China defiant, Trump-Xi talks seen likely at G20 summit in June
* Brent crude futures up 1.8%, WTI up 1.5%
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By Thyagaraju Adinarayan
LONDON, May 13 (Reuters) - Global equities fell on Monday after their worst week of 2019 as hopes of an imminent U.S.-China trade deal were crushed, raising fears of a fresh round of tit-for-tat tariffs.
The impasse left investors bracing for retaliation by China for Washington’s increase on Friday of tariffs on $200 billion worth of Chinese goods. The move followed accusations by U.S. President Donald Trump that Beijing had reneged on earlier commitments.
Trump on Monday warned China not to retaliate against an increase in tariffs he imposed last week.
Escalation could tip the U.S. economy into recession, a risk flagged by the inversion in U.S. Treasury bond yield curve between three-month and 10-year rates for the second time in under a week.
The U.S. curve has inverted before each recession in the past 50 years. It gave a false signal just once.
“Overall, in the short term the chances of recession have increased, so equity markets will be priced on the back of that,” said Justin Oneukwusi, portfolio manager at Legal & General Investment Management.
The pan-European Stoxx 600 slipped 0.5%. S&P 500 futures shed 1.3%.
Chinese shares tumbled. The benchmark Shanghai Composite and the blue-chip CSI 300 indices shed 1.2% and 1.8%, respectively.
The offshore Chinese yuan fell to its lowest in more than four months, 6.88 to the dollar.
Trade talks as Washington demanded promises of concrete changes to Chinese law and Beijing said it would not swallow any “bitter fruit” that harmed its interests.
“How far this escalates is what the market is really worried about ... The important thing is what’s the impact on growth, and that’s what the market is really fearing,” Oneukwusi said.
White House economic adviser Larry Kudlow told Fox News that China needed to agree to “very strong” enforcement provisions to secure a deal. He said the sticking point was Beijing’s reluctance to put into law changes that had been agreed.
Kudlow said U.S. tariffs would remain in place while negotiations continued and Trump was likely to meet Chinese President Xi Jinping at a G20 summit in Japan in late June.
“The risk of a full-blown trade war has materially increased, even though both sides seem to still want a trade deal and talks are expected to continue,” UBS economist Tao Wang said.
Washington said it was preparing to raise tariffs on all remaining imports from China, worth about $300 billion.
“Our base case is for limited progress and Chinese retaliation,” said Michael Hanson, head of global macro strategy at TD Securities.
Major currencies were relatively calm. The euro was steady at $1.1234 and the dollar little changed against a basket of currencies at 97.270.
“We’ve seen pretty restrained moves among currencies, despite some severe rhetoric between the U.S. and China so far. However, cause for concern remains a weaker yuan, which should be a warning sign for risk assets,” said Marc-André Fongern of MAF Global Forex.
Emerging-market stocks were down 0.9 percent, hovering near January lows. JPMorgan said it had reduced its emerging-markets risk for the second time in as many months on Monday following the set-back in U.S-China trade talks.
In commodities, oil futures jumped on growing concern about supply disruptions in the Middle East. Brent crude futures rose 1.8% to $71.90 a barrel and U.S. West Texas Intermediate futures were up 1.5% at $62.56 per barrel.
In digital currencies, Bitcoin hovered above $7,000 on Monday, close to nine-month highs, as the biggest cryptocurrency’s 2019 rally gathered steam.
Reporting by Thyagaraju Adinarayan, additional reporting by Sujata Rao; editing by Larry King