Asia stocks paralyzed, bonds electrified by recession risk

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Asian shares braced for more volatility on Thursday as eye-catching easings by c...

SYDNEY - Asian shares braced for more volatility on Thursday as eye-catching easings by central banks stoked fears of global recession, driving U.S. yields to near-record lows and lifting gold past $1,500 for the first time since 2013.

Early Thursday, Asian share markets were wobbly, as investors tried to find their footing after enduring a string of heavy losses. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.03%, having shed 8% in less than two weeks. Ten-year yields dropped further below three-month rates, an inversion that has reliably predicted recessions in the past.

Futures moved to price in a 100% probability of an Fed easing in September and a near 30% chance of a half-point cut. Some 75 basis points of easing is implied by January, with rates ultimately reaching 1%. The Bank of Japan would be under particular pressure as its yen has gained sharply from the flood to safe havens, leaving it at 106.10 per dollar from 109.30 just a week ago.

 

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