SYDNEY (Reuters) – The Japanese yen hovered near a six-week high on Monday while Asian shares are expected to start lower as risk assets fell out of favor on growing worries about an impending U.S. recession, sending global bond yields plunging.
In Asia, Nikkei futures pointed to a weak start for Japan. Australian shares fell 0.3 percent at the open while New Zealand’s benchmark index faltered 0.9 percent.
Investors - Eye - Details - US - Investigation
Investors also kept one eye on the details of a nearly two-year U.S. investigation which found no evidence of collusion between Donald Trump’s election team and Russia, in a major political victory for the U.S. President.
U.S. stock futures were marginally higher during early Asian hours.
Friday - US - Stock - Indexes - Percentage
On Friday, all three major U.S. stock indexes registered their biggest one-day percentage losses since Jan.3 with the Dow sliding 1.8 percent, the S&P 500 off 1.9 percent and the Nasdaq dropping 2.5 percent.
Concerns about the health of the world economy heightened last week after cautious remarks by the U.S. Federal Reserve sent 10-year treasury yields to the lowest since early 2018. Adding to the fears of a more widespread global downturn, manufacturing output data from Germany showed a contraction for the third straight month.
Response - Treasury - Yields - Rate - Time
In response, 10-year treasury yields slipped below the three-month rate for the first time since 2007. Historically, an inverted yield curve – where long-term rates fall below short-term – has signaled an upcoming recession.
“We have re-run our preferred yield curve recession models, which now suggest a 30-35 percent chance of a...
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