HONG KONG (AFP) - Asian markets fell on Tuesday morning (Dec 10) with investors keeping a nervous eye on the US-China trade talks with less than a week until Washington is due to impose fresh tariffs on Chinese goods.

The general consensus is that the two superpowers will eventually hammer out a partial pact as part of a wider agreement, which has fuelled a global equity rally for weeks, though comments from both sides - both optimistic and downbeat - are keeping dealers on their toes.

While the week is chock-full of key events including the UK general election and central bank decisions in the US and Europe, observers say the China-US negotiations are the only game in town.

The key concern for now is that with the Dec 15 deadline approaching, Donald Trump still has not scrapped planned levies on US$160 billion of Chinese goods, which many fear could derail the long-running talks.

"Given the market has bought into the December tariff delay in a big way, all hell could break loose if the tariffs don't get postponed," said Stephen Innes at AxiTrader.

"Indeed, that would be a bitter pill for investors to swallow as the reality.. sets in that they have yet again been taken down the trade talk garden path only to end up at the cliff edge."

POUND HOLDS GROUND

Still, agriculture secretary Sonny Perdue provided some hope to markets when he said he did not think the levies will be imposed, though analysts pointed out that while this is positive, the ultimate decision is in Trump's hands.

In early trade Hong Kong slipped 0.1 per cent, Shanghai eased 0.2 per cent and Tokyo went into the break marginally lower.

Sydney, Singapore and Taipei each eased 0.2 per cent, while Manila was off 0.5 per cent. However, Seoul, Wellington and Jakarta edged higher.

There was little early reaction to data showing Chinese consumer inflation picked up in November but not as much as expected, with surging pork prices the key reason owing to African swine fever, which has seen a vast culling of the country's pig herd. However, the drop in factory prices eased, soothing concerns about future inflation rates.

The pound remains well supported going into the final straight of the UK national vote, with Prime Minister Boris Johnson tipped to win a clear majority that will help him drive through his Brexit deal.

However, his lead has narrowed slightly in recent days, which is keeping traders on guard for a possible hung parliament and more uncertainty.