Morning Report

Asian stocks fell on Wednesday, dragged by Wall Street’s tumble as sharp declines in long-term U.S. Treasury yields and resurgent trade concerns stoked investor worries about global economic growth.
Global equities have been shaken as a flattening U.S. Treasury yield curve – a result of a steep fall in longer-dated yields – fanned recession jitters and as U.S.-China trade conflict woes resurfaced after a temporary lull.

Australian stocks lost 1.3 percent after Australia’s third quarter growth data fell short of expectations. The Australian dollar was down 0.5 percent at $0.7307.

Japan’s Nikkei fell 1.15 percent and South Korea’s KOSPI shed 1 percent.

The Dow retreated 3.1 percent and the Nasdaq sank 3.8 percent on Tuesday.

The spread between the two-year and 10-year Treasury yields was at its flattest level in over a decade. A flatter curve is seen as an indicator of a recession, with lower longer-dated yields suggesting that the markets see economic weakness ahead.

The dollar sagged in the wake of falling Treasury yields, with its index against a basket of six major currencies .DXY briefly stooping to a near two-week low of 96.379 overnight before edging back towards 97.00.

The greenback fell against the safe-haven yen, losing 0.75 percent overnight before stabilising at 112.86 yen

The pound was little changed at $1.2717 having touched a 17-month low of $1.2659, rattled by Brexit setbacks in parliament.

The People’s Bank of China (PBOC) set the yuan reference rate at 6.8476 vs the previous day’s fix of 6.8939.

Crude oil prices were lower amid fears that demand would stall on the back of the trade war between the United States and China. [O/R]

U.S. crude futures CLc1 were down 0.8 percent at $52.82 per barrel.

Source Reuters

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