Bond yields near record lows, shares struggle on darkening global outlook
By Hideyuki Sano TOKYO (Reuters) - Global bond yields flirted with record low levels while stocks struggled to recover on Thursday as economic turbulence from intensifying U.S-China frictions and the spectre of a no-deal Brexit drove investors to safer harbours. MSCI's broadest index of Asia-Pacific shares outside Japan was flat in early trade while Japan's Nikkei rose 0.14%
By Hideyuki Sano
TOKYO (Reuters) - Global bond yields flirted with record low levels while stocks struggled to recover on Thursday as economic turbulence from intensifying U.S-China frictions and the spectre of a no-deal Brexit drove investors to safer harbours.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was flat in early trade while Japan's Nikkei <.N225> rose 0.14%.
On Wall Street, the S&P 500 <.SPX> gained 0.65%, due in part to gains in energy sector following a rebound in oil prices.
Sharp falls in U.S. Treasury yields also meant equities might be attractive for some investors even though traders in stocks globally have bailed out in droves in the past several months due to recession worries.
Bond markets around the world painted a gloomier picture, with yields on 30-year U.S. Treasuries and 10-year German bunds yield both hitting record lows - 1.905 percent
The Italian 10-year bond yield
In Asia, the 10-year Japanese government bond yields
"Falls in global bond yields reflect growing concerns that long-term global growth are slowing down on U.S.-China tensions and subsequent global supply chain disruptions," said Tomoo Kinoshita, global market strategist at Invesco Asset Management in Tokyo.
"Stock markets on the other hand are supported in the near-term by hopes of more stimulus, notably from the Federal Reserve and the European Central Bank," he said.
The two major central banks are expected to cut rates next month, while many investors believe the Bank of Japan could join the fray if market sentiment weakens further.
The Trump administration on Wednesday made official its extra 5% tariff on $300 billion in Chinese imports and set collection dates of Sept. 1 and Dec. 15.
That means products such as smartwatches, Bluetooth headphones, flat panel televisions and many types of footwear will be levied from next month, raising worries about U.S. consumption, one of the few remaining bright spots in the world economy.
The precious metal markets highlighted investors' quest to buy safer assets.
In the currency market, major currencies saw limited moves for now, with the yen flat at 106.08 per dollar
But the MSCI emerging market currency index <.MIEM00000CUS> is at lowest levels since mid-November, having fallen 0.8% so far this week and on course to mark its biggest monthly fall in more than seven years driven by worries about global slowdown.
The British pound licked wounds at $1.2217
The move will limit the time opponents have to derail a disorderly Brexit but also increases the chance that Johnson could face a vote of no-confidence in his government, and possibly an election.
"From an economic point of view, actively pursuing a no-deal Brexit through suspending parliament is tantamount to actively pursuing a recession," said Seema Shah, Chief Strategist, Principal Global Investors in London.
Oil prices held firm after a gain of nearly 2% in the previous session as a larger-than-expected decline in U.S. crude stockpiles helped ease worries about weakening oil demand.
In Asia Brent crude
(Additional reporting by Tomo Uetake; Editing by Shri Navaratnam)
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By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
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