Global equities plunged to more than two months of low Asian trading prices on Thursday, tracing the Wall Street image as an inverted US bond yield curve sent a flashing warning to investors about rising recession risks.
TOKYO: Global equities dropped to more than two months low prices in early Asian trading on Thursday, tracking the Wall Street image as an inverted US bond yield curve sent a flashing warning to investors about rising recession risks.
The yield on 10-year US Treasury bonds fell below the two-year yield, intraday, for the first time since 2007, in what is known as a yield curve inversion and is widely seen by investors as a sign that a recession is coming.
Asia's shares fell open with Japan's Nikkei average tumbling 2.0 percent and Australian equities falling 1.9 percent.
Graphics: Asian Stock Markets – https://tmsnrt.rs/2zpUAr4ebrit19659008 ?? MSCI ACWI, which contains measurements of 49 stock markets around the world, throws 2.1 percent to its lowest level since June 4, while E-Mini futures for the S&P 500 lost 0.1 percent in early Asia.
"The yield curves are all the crying timber that a recession is almost a reality and investors are tripping over themselves to get out of the way when economic recession causes corporate earnings to cause stocks and stocks to fall as much as 20 percent," said Chris Rupkey, CFO at MUFG Union Bank.
MSCI's broadest index for Asia-Pacific shares outside Japan fell 0.4 percent in early trade.  All three major US … indices closed down about 3 percent, with Blue-chip Dow posting its biggest one-day point decline since October, major stock indices in Europe closed 2 percent or close to it while crude prices fell nearly 5 percent to a dot.  Economic data from China and Germany suggested a faltering global economy, hit by the worsening US-China trade war, Brexit and geopolitical tensions.
Senior US officials said on Wednesday that China has not made any concessions after US President Donald Trump suspended 10 percent tariffs on over US $ 150 billion in Chinese imports, the latest sign of efforts to reach a trade agreement goes nowhere.
Large currencies were relatively calm, with the dollar index rising 0.2 percent and the euro adding a margin of 0.1 percent to US $ 1,1414. The Japanese yen strengthened 0.1 percent against the greenback of $ 105.83 per dollar, after rising 0.8 percent on Wednesday.
Oil prices fell 3 percent on Wednesday after fresh Chinese and European economic data aroused global demand, and US commodities rose unexpectedly for the second week in a row.
In early Asian trade, the US West Texas Intermediate (WTI) crude futures decreased 0.7 percent to $ 54.82 per barrel after dropping 3.3 percent in the previous session.
Gold rose more than 1 percent on Wednesday as an inverted yield curve in the US Treasury Department and weak data in the euro area propelled investors towards security ocean duty.
Spot gold stood at $ 1,516.55 an ounce early Thursday, flat on the day and not far from its six-year high marked Tuesday.
(Reporting by Tomo Uetake; Editing by Sam Holmes)