SYDNEY -Major share markets were deep under water in Asia on Monday as fears the United States could be heading for recession triggered mass risk aversion and wagers interest rates will have to fall sharply, and quickly, to support growth.
Investors stared where they finished on Friday by knocking Nasdaq futures down 1.64%, while S&P 500 futures dropped 1.04%.
MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.8%, while Japan’s Nikkei shed another 6.4% to hit seven-month lows.
Treasury bonds were in demand with 10-year yields down at 3.77%, the lowest since mid-2023.
Two-year yields sank 50 basis points last week to 3.85% and could soon slide below 10-year yields, turning the curve positive in a way that has heralded recessions in the past.
The worryingly weak July payrolls report saw markets price in a near 70% chance the Federal Reserve will not only cut rates in September, but ease by a full 50 basis points….
