SYDNEY: Asian share markets were painted red on Thursday as recession concerns sent bond yields spiraling lower across the globe, overshadowing central bank attempts to calm frayed nerves.
Worries that the inversion of the U.S. Treasury curve signaled a future recession only deepened as 10-year yields fell to 15-month lows at 2.35 percent.The latest lunge lower was led by German bunds where 10-year yields dived deeper into negative territory after European Central Bank President Mario Draghi said a hike in interest rates could be further delayed.
That shift came hot on the heels of a dovish surprise from the Reserve Bank of New Zealand which abandoned its neutral bias to say the next rate move would likely be down.sentifi.comThe RBNZ explicitly cited all the easing moves by other central banks as a reason for its turnaround since they had put unwanted upward pressure on the local dollar.That is one reason markets are wagering the Reserve Bank of Australia will also be forced to cut rates, simply to stop its currency from appreciating.
Draghi's comments likewise tugged the euro back to US$1.1250, and left the U.S. dollar firmer against a basket of its competitors at 96.967.Sterling had its own troubles as an offer by British Prime Minister Theresa May to quit to get her European Union deal through parliament failed, leaving uncertainty hanging over the Brexit process.In commodity markets, palladium was the focus of attention after sliding 7 percent on Wednesday as its meteoric rally finally ran into profit-taking.
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