Shares fall steeply in Asia as financial markets rocked by recession warnings - business live
(The Guardian China)

Traders in the Asia-Pacific region are braced for a turbulent day after the inverted US bond yield curve sent alarm bells ringing around the world 5.11am BST Traders in Tokyo are back from their lunch and the Nikkei is on the slide. It´s down 1.55% to 20,333. The Hang Seng has slipped as well and is up just 0.03%. And London is now on course to slide into the red when it opens this morning. And the Dax30 in Frankfurt. The Dow is still on the dancefloor though and looking at a modest bounce of 30 points or 0.13%. 4.35am BST I´m taking a quick break so here are the main developments so far today: 4.27am BST One factor in the pickup in Asian shares could be a reassessment of the risks of the celebrated inverted bond yield curve. Several analysts and experts, including the former Federal Reserve bosses Alan Greenspan and Janet Yellen, have pointed out that structural market change means that the inverted yield curve might not be as important or reliable as it once was.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.Current yield curve inversion is unusual compared to history as it´s not associated with a high real Fed funds rate (average of past 5 recession episodes 3.2%). Currently the real rate is around zero. That either means the curve is providing a false signal (due to a structural flattening) or the `neutral` real Fed funds rate has fallen a lot and even a near-zero level (as at present) is restricting the economy. The latter is clearly US President Trump´s claim. My view is that the yield curve is structurally flatter and not providing a signal of recession... as confirmed by still positive indicators such as US jobless claims.Trump is right on the Fed: The Fed needs to cut to 0.5% (or less) & do it soon - the boost to the economy will be material.The blabber on the yield curve fails to note that aggressive Fed cuts will fix the issue. It ...