Yen strengthens and shares fears of recession in the United States

SYDNEY (Reuters) – The Japanese yen hit a six-week high on Monday as Asian stocks should begin to fall as risky badets falter as worries grow over the looming recession in the United States. falling global bond yields.

In Asia, Nikkei futures posted a weak start for Japan. Australian equities fell 0.3% at the outset, while the New Zealand benchmark fell 0.9%.

Investors also kept an eye on the details of a nearly two-year US investigation, which revealed no evidence of collusion between Donald Trump's electoral team and Russia, which is a major political victory for the American president.

US equity futures were slightly higher early in the day in Asia.

Friday, the three major US stock indexes recorded their largest percentage loss of a day since January 3: the Dow fell 1.8%, S & P 500 1.9% and Nasdaq 2 , 5%.

Worries about the health of the global economy intensified last week after cautious remarks by the US Federal Reserve placed the 10-year Treasury yields at their lowest since early 2018. In addition a more general global downturn, Germany's manufacturing output data contracted for the third consecutive month.

In response, yields on 10-year Treasury bills fell below the three-month rate for the first time since 2007. Historically, a reverse yield curve – where long-term rates are lower than short-term rates – has announced an impending recession.

"We have re-used our preferred yield curve recession models, which now suggest a US recession probability of 30 to 35% over the next 10 to 18 months," said markets strategist Tapas Strickland. National Australia Bank.

According to Strickland, a recession probability in the next 10 to 18 months is usually 40 to 60%, based on previous recessions.

"The risk of recession in the United States has increased and is shining day by day, which will encourage markets to keep down the rate of Fed rate cuts."

Much of the concern about global growth comes from Europe and China, who are fighting separate tariff wars with the United States. The political turmoil in Britain following the country's exit from the European Union is also a major surplus for risky badets.

On Sunday, Rupert Murdoch's Sun newspaper announced in an editorial on the front page that British Prime Minister Theresa May was to announce his resignation Monday as soon as his agreement on Brexit was approved.

The pound was last flat at $ 1.3209 after three consecutive days of wild gyrations. The currency slipped 0.7% last week.

Politics was also on the agenda in the United States.

The highly anticipated Mueller report on whether Trump's election campaign with Russia helped Trump defeat his Democratic opponent, Hillary Clinton, marked an important step in his presidency as he prepares for his battle for re-election of 2020.

In the foreign exchange market, the Japanese yen – a safe haven considered – has remained near its highest level since February 11th. It was 0.1% at 110.04 for a dollar.

The Australian dollar, a liquid substitute for the risky game, lost $ 0.7072 for its third consecutive loss.