TOKYO (Reuters) – Global stocks were breaking down and oil prices stretched punitive on Thursday as a resultant U. bond yield curve, reinforcing fears of global recession.
FILE FILE: Man uses a mobile phone in front of an electronic board displaying Japan's Nikkei average outside of brokerage in Tokyo, Japan, October 12, 2018. REUTERS / Toru Hanai
Asia markets were already on the back after the three major US stock indices closed about 3% overnight, with the blue-chip Dow.
Existing stocks resulted in a drop in overnight US Treasury notes US10YT = RR owing to the US2YT = RR, the first such fall from 2007, overnight. known as yield curve inversion and widely seen as an emerging recession signal.
Global growth defects have been established in recent months, especially as a bruising trade war between the US and China was signposted to move businesses and consumers.
There were debilitating effects of the Sino-U trading war. The growth was fully displayed this week as German economy entered into a contract in the second quarter and a raft of Chinese economic data showed that they were deeper in the Asian power house.
(Graphic: U. yield curve inversion 14 August 2019 – tmsnrt.rs/2YQ1VhR)
The broadest index of Asia-Pacific shares outside Japan decreased by 0.9%, while Japan's Nikkei average dropped. N225 1.4% and Australian stocks went down 2.1%.
China's markets were also hit, with the Shanghai Composite .SSEC benchmark and the blue-chip CSI300. CSI300 down 1.1% and 1.0%, respectively, and lost IEI Hong Kong.
“These curves result in all wood crying that recession is almost real and investors are spending themselves out of the way as economic recession hurts corporate earnings and stocks can fall as much as 20%,” Chris Rupkey, chief economist at MUFG Union Bank said.
In early Asian trade, the US 10-year Exchequer results were reduced at least in three years, and the results fell 30 years US30YT = RR as low as 1.991%, below the 2% floor for the Federal Reserve's policy rate for the first one time ever. Swimming took less than 2% of the total curve up to 30 years below the official interest rates.
US stock futures ESc1 succeeded to keep somewhat in Asian trade, while they were destroying earlier losses.
Kerry Craig said, global market strategies at Asset Management J.P. Morgan, that investors should also note how big markets had changed over the past decade, which meant that reversing a yield curve would not be the same.
“Signing a warning sign has a yield curve inversion – investors should check that their portfolios are resilient. But it is not a reason to panic or to go into destruction, ”he said in a note.
However, oil prices fell on Thursday to prolong overnight acute losses as the US raw shortage rose, fear of the recession and economic data from China and Europe. (O / R). But gold prices remained stable Thursday after they have stopped buying safely in the previous trading session.
Raw bude was down 0.8%, at $ 59.03 barrel, after falling 3% in the last session, while U. crude oil fell 0.5% to $ 54.96 barrel, after falling 3.3% in the previous session.
As the bond markets focused on the recession on Wednesday and set aside the major stock indices, President U. Donald Trump blamed the FED to continue to raise rates at the end of last year. .
"China is not our problem, although Hong Kong is not helping. Our problem is the FED. We have raised too much and too fast now."here)
Senior U. officials said on Wednesday that China has not made any trade concessions after Trump deferred the 10% Chinese tariffs over $ 150 billion, the latest sign that efforts to deal with trade were not in line. to achieve.
The large currencies were relatively stable, with the dollar index. DXY has a 0.1% derogation to 97.936 and the euro EUR = adding 0.1% to $ 1.1144. The Japanese yen was fixed against the inflammation at 105.93 per dollar, after it secured 0.8% Wednesday.
“The markets are abolishing the recession overnight, which stimulates the inverse yield curve. But I think we will see some silence back a long time since curves do not place the U.
The gold rose by more than 1% on Wednesday as a US yield curve on the Exchequer.
The gold spot was at $ 1,518.55 per oven early Thursday, fair on the day and not far from Tuesday marked Tuesday.
Reporting by Tomo Uetake; Edited by Sam Holmes & Shri Navaratnam
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