Stocks are declining, bonds rise, while America's recession risk is orange & # 39; orange & # 39; With Reuters



[ad_1]

© Reuters. Women dressed in festive kimonos look at an electronic board showing Nikkei's average after a New Year's opening at the Tokyo Stock Exchange (TSE), which wanted the success of the Japanese stock market in Tokyo

By Swati Pandey

SYDNEY (Reuters) – Investors damped their shares on Monday and escaped bond security, while the Japanese yen floats close to six weeks as risky assets fell into worries about an upcoming recession in the US that caused global returns.

At the beginning of Asian trading, futures contracts on US stocks turned negative with the E-minis scattering 0.5 percent. MSCI's largest index of Asia-Pacific shares outside Japan fell by 0.6 percent per week to its lowest value. Japan dropped 2.9 percent, South Korea's Kospi index fell by 1.5 percent and Australian shares by 1.3 percent.

On Friday, all three major US stock indices recorded the largest single-day loss since January 3, falling 1.8 percent, the S & P 500 index by 1.9 percent and Nasdaq by 2.5 percent.

Concerns about the health of the global economy intensified last week, when cautious comments by the US Federal Reserve sent a 10-year treasury yield to its lowest level since the beginning of 2018.

In addition to fears of a wider global recession, data on production from Germany showed a contraction for the third month. In the United States, pre-production and service activity measures for March showed that both sectors grew more slowly than in February, according to IHS Markita.

In response to this, the 10-year yield of the treasury fell for the first time after 2007 below a three-month interest rate. Historically, the curve of return is reversed, where long-term interest rates are falling short-term, pointing to a future recession.

"We have again launched our preferred yield curve recession models, which now show a 30-35% probability that the US recession will emerge in the next 10-18 months," said Tapas Strickland, a market strategist at National Australia Bank.

Usually, the 40-60% probability sees a recession in the next 10-18 months, Strickland added, who based his analysis on previous recessions.

"The risk of a recession in the United States has increased and blazed orange, which will allow markets to appreciate the high potential for cutting the Fed."

As bonds rose on Monday, yields of 10-year Japanese government bonds fell to minus 8 basis points, the weakest since September 2016. The return on the Australian 10-year-old fell to a record low of 1,756.

POLITICAL SERVICES

Many concerns about global growth come from Europe and China, which is struggling with separate tariff wars with the United States.

Policy was also centered on the United States and the United Kingdom.

Almost two years of ongoing US investigation found no evidence of collusion between the Donald Trump and Russia constituency, which was a major political victory for the US president.

The long-awaited Mueller reported whether the Trump campaign had concluded an agreement with Russia to help Trump defeat its democratic opponent, Hillary Clinton, which represented a major milestone in his presidency when he prepared for his newly elected battle in 2020. t

Political turmoil in the UK due to the country's exit from the European Union remains in contrast to risky assets.

On Sunday, Sun Rupert Murdoch's newspaper was addressed by British Prime Minister Theresa May, who will announce on Monday that he will resign as soon as her agreement on Brexit is approved.

After three consecutive days of wild movement, the British pound was lower at $ 1,3189. Last week, the currency fell 0.7 percent.

On currency markets, the Japanese yen – a detected safe haven – kept close to the highest price range since February 11th. That was the last tile with 109.95 per dollar.

The Australian dollar, a liquid proxy for risk, fell for the third consecutive loss session at $ 0.7073.

In commodities it fell by 33 cents to 58.71 USD per barrel. futures contracts fell by 24 cents to $ 66.79.

[ad_2]

Source link