Vardy scores 3, Leicester stun Man City in wild 5-2 win    Struggling Schalke part company with coach Wagner    Armenia says it shot down 2 Azerbaijani copters in dispute    Liverpool great Souness backs midfielder Thiago to shine in England    Pakistan says Indian fire kills 1 soldier in Kashmir    Syria minister calls Turkey main terrorism sponsor in region    Morocco faces down COVID spread with tough rules    Three suspects in Fairmont rape case detained pending investigation    The people's victory    Ethiopian PM says Addis Ababa has 'no intention of harming' Egypt, Sudan with GERD    Egypt's Assiut, Sohag int'l airports receive first Saudi Airlines flights since resumption of air traffic    Egypt's central banks cuts interest rates by 50 bps    'It's important to show our ingenuity': Nigerian collector promotes local artistic heritage amidst Black Lives Matter    EgyptAir receives 11th Airbus A220-300 from Canada    3 policemen, 4 prisoners killed in Cairo jailbreak attempt    Last-minute bids    Wust El Balad band gives a concert at the Fountain theatre    Khan Almaghraby gallery group exhibition is a must go    Egyptian insurance companies' premiums 9.6% up in five months    Egypt's President Sisi names new head of anti-corruption watchdog    Egypt's offers 18 bln pounds T-bills on Sunday    EgyptAir offering discounts for some international flights    Egypt records 212 new coronavirus cases, 14 deaths on Saturday    Egypt to require PCR coronavirus tests for airport travelers    Egypt sends 125 tonnes of glass by sea to Beirut    Legend Messi officially wants to leave Barcelona, hands transfer request    Global smartphone sales drop 20% in Q2, yet Apple's iPhone sales steady    Sisi: Egypt keen on establishing development projects with Iraq, Jordan    Egyptian megastar Amr Diab releases new hit music video    Making of Harry Potter will be available for fans at new park in Tokyo    Egypt's Senate elections official results to be announced Wednesday    Netflix Egypt is bringing megastar Amr Diab back with a new original    Egypt reopens Rafah border crossing for first time since April    Egypt's senate elections 2020 trending on social media in few days    African Champions League final will be played on Oct. 16-17, CAF says    No room to delay Egyptian Premier League games – EFA's board member    The Facebook Preacher's Search for Fame, and Egypt's Economy    Egypt calls on UNSC to address oil spill risks off Yemen coast    Egypt economically strong in face of COVID-19, reforms ongoing: International Cooperation Minister    Arafa Holding reports $144,000 COVID-19-related losses in April    Egypt's efforts in Libya to activate free will of Libyan people: Al-Sisi    Hyksos campaigns were internal takeover, not foreign invaders: study    COVID-19 affects Egypt sporting clubs    COVID-19 will soon turn to seasonal like swine flu: Presidential Health Advisor    ‘Egypt's Support' coalition convenes to discuss its Senate election list    Robbery attempt leads to discovery of Ptolemaic monuments in Qena    Flouting international guidance, Ethiopia unilaterally starts filling its Nile dam    Zaha speaks out after online racial abuse    

Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.

Asia markets fall as bond stocks signal recession warning
Published in Amwal Al Ghad on 15 - 08 - 2019

Asian markets dropped Thursday afternoon as the main yield curve in U.S. Treasurys inverted, triggering fears over the state of the U.S. economy.
In mainland China, stocks fell by the afternoon. The Shanghai composite shed 0.62 percent, while the Shenzhen component declined 0.73 percent and Shenzhen composite slid 0.754 percent. Hong Kong's Hang Seng index slipped 0.17 percent.
In Japan, the Nikkei 225 fell 1.56 percent, while the Topix index dropped 1.33 percent. Australia's S&P/ASX 200 also tumbled 2.61 percent, as data on Thursday showed the jobless rate unchanged despite employment numbers in the country soaring past expectations in July.
The MSCI Asia ex-Japan index shed 0.8 percent overall.
Markets in South Korea and India are closed on Thursday for holidays.
Treasury yield curve inversion
Investors watched the bond market on Thursday, after the yield on the benchmark ten-year Treasury note briefly broke below the 2-year rate overnight, an odd bond market phenomenon that has historically been a reliable indicator of economic recessions. The yield on the 30-year Treasury bond was also sent to a new record low on Wednesday.
The yield inversion between the 10 and 2 year Treasury note happened again in the afternoon of Asian trading hours, with the yield on the 10-year Treasury note last at 1.5471 percent, as compared to the 2-year rate at 1.5565 percent. The 30 year Treasury bond also touched fresh historic lows on Thursday.
"We shouldn't ignore that this historically reliable indicator of the economy is telling us a recession may be looming. But markets have changed significantly in the last decade and yield curve inversion is not the harbinger it once was," Kerry Craig, global market strategist at J.P. Morgan Asset Management, wrote in a note.
"Yield curve inversion is flashing a warning sign – investors should check their portfolios are resilient. But it's not a reason to panic or to lean into the sell-off," Crais said. "The market corrections can also offer fresh opportunities to pick up equities at more reasonable valuations."
Bank shares decline
Bank stocks across the region mostly fell on Thursday, after financials stateside saw a rout overnight amid the market turmoil on Wall Street.
In Japan, shares of Mitsubishi UFJ Financial Group slipped 1.29 percent and Nomura fell 1.31 percent. Hong Kong-listed shares of HSBC declined 1.7 percent, while China Construction Bank advanced 0.89 percent.
Over in Australia, the financial subindex declined more than two percent as the so-called Big Four banks saw their stock decline: Australia and New Zealand Banking Group fell 2.96 percent, Commonwealth Bank of Australia shed 2.38 percent, Westpac slipped 2.91 percent and National Australia Bank dropped 2.75 percent.
Yuan watch
The People's Bank of China set its official midpoint reference for the yuan at 7.0268 per dollar on Thursday, weaker than analysts' expectations.
It was the sixth consecutive session where the People's Bank of China (PBOC) fixed the midpoint at a level weaker than the psychologically important 7-yuan-per-dollar mark.
The onshore Chinese yuan last traded at 7.0278 against the greenback, while its offshore counterpart changed hands at 7.0413 per dollar.
Overnight stateside, the Dow Jones Industrial Average plunged 800.49 points to close at 25,479.42 — its worst percentage drop of the year and fourth-largest point drop of all time.
The S&P 500 fell 2.93 percent to finish its trading day at 2,840.6, while the Nasdaq Composite closed 3.02 percent lower at 7,773.94.
The moves came amid rising fears over the global economy, with China reporting weaker than expected industrial output for July and Germany posting a negative gross domestic print for the second quarter.
Currencies and oil
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.930 after surging from levels below 97.8 yesterday.
The Japanese yen, widely viewed as a safe-haven currency, traded at 105.87 against the dollar after strengthening sharply from levels above 106.5 in the previous session. The Australian dollar changed hands at $0.6777 after touching an earlier low of $0.6743.
Oil prices slipped in the afternoon of Asian trading hours after seeing sharp losses on Wednesday. International benchmark Brent crude futures declined 0.72 percent to $59.05 per barrel, while U.S. crude futures shed 0.6 percent to $54.90 per barrel.
Source: CNBC

Clic here to read the story from its source.