Markets slide as China threatens to escalate trade war - business live
(The Guardian China)

Markets slide across the Asia-Pacific region after the inverted US bond yield curve sent alarm bells ringing around the worldUS yield curve inverts for second-day running10-year US bonds offer lower return than 2-year - a worrying signStocks have fallen across Asia todayLast night, Wall Street tumbled by 3% 10.27am BST NEWSFLASH: China has launched a fresh attack on America over the trade war, giving investors another reason to panic.The Chinese finance ministry has accused the US of violating the consensus drawn up between Donald Trump and Xi Jinping.*CHINA SAYS WILL HAVE TO TAKE COUNTERMEASURES ON U.S. MOVES*CHINA: U.S. ACTION VIOLATES CONSENSUS REACHED IN OSAKA MEETINGAll eyes on USDCNH here... pic.twitter.com/GvzGcqkz48 10.11am BST Deutsche Bank analyst Jim Reid is so excited about the inversion of the US yield curve that he´s broken off from his holiday to explain why (in his view) it´s a very serious warning sign.Every inversion since 1956 has seen a recession follow. Although the median length of time to a recession is 17 months, credit spreads have pretty much exclusively widened from the point of inversion onwards. Of those 2 of the 9 recessions since the 1950s took more than 2 years to materialise after the first inversion though. The first in the mid-1960s (took nearly 4 years) was due to a Fed policy error where the Fed didn´t raise rates as expected (they actually cut) with inflation rising. The curve re-steepened and only inverted again as the Fed reversed course and hiked a few quarters later. The recession soon followed the subsequent inversion. The second, following the May 1998 inversion, took 34 months until a recession arose but the inversion was relatively brief and occurred just prior to the Russian/LTCM crisis where the Fed rapidly cut 75bps thus re-steepening the curve. The Fed then raised rates again from 1999 and the curve re-inverted in early 2000, around a year before the actual recession. 9.40am BST Just in: UK retail sales grew last ...