By Marc Jones
LONDON (Reuters) – Investors sought the security of government bonds, the yen, the Swiss franc and gold on Monday, as rising trading tensions left shares again and pressed oil near the bear market area.
After a dry May that dried $ 3 trillion of global stocks, the worsening trade and broader economic background experienced a beginning start in June.
European stocks fell further and the Swiss franc jumped to a two-year high when Beijing sent another shot over Washington's bows on trade, and then came the euro area's data in weak [nS8N1[ads1]Z9051] even though the main reason was in bonds.
German government bond yields – which are reversed in price – were pinched at an all-time low level, and those on two-year US government bonds saw their biggest two-day fall since early October 2008, when the global financial crisis kicked off. [nL8N23A1P1]
"Bonds are more or less on fire, and I think we should spend the week of trading that dominates everything else," Societe Generale (PA 🙂 global strategic Kit Juckes. 19659004] Also, with German and British political concerns and concerns about the Italian economy, "it's hard to believe that the yen won't be at least one of the winners this week," he said.
The Japanese currency rose, The same was true of Europe's security game, the Swiss franc, which rallied to its highest in almost two years against the euro. The euro fluctuated at $ 1.171 () after being stuck in one of its densest range ever against the dollar. [/FRX]
Asia-Japan stocks had improved overnight as gains in South Korea () and India () counteracted weakness in Tokyo and elsewhere. Chinese stocks () ended little changed, even though the yuan faced pressure.
A private survey of China's manufacturing sector [CNPMI=ECI] published on Monday suggested a modest expansion in activity as export orders jumped off a contraction. [nS7N1DB01B]
Economists noted increase in new export orders pointed to possible frontloading of US shipments to avoid potential wage increases that US President Donald Trump – who kicked off a potentially confrontational UK visit on Monday – had threatened to shed an additional $ 300 billion dollars of Chinese goods.
"Chinese companies are likely to see the current export conditions as serious as under Chinese shock in 2015," said Wang Shenshen, economist at the Tokai Tokyo Research Center.
RISING TENSIONS, FALLING ACTIVITY
With the bitter trade weight, factory activity was gathered in most Asian countries and the euro area last month, surveys showed. [nL4N23A13B]
The downturn in the eurozone was for the fourth month's run, and at an accelerated pace, like a fluctuating demand for the automotive industry, Brexit and broader political uncertainty began.
"The sector is still in its toughest syllable since 2013," says Chris Williamson, chief economist at IHS Markit.
Sino-US Tensions rose again this weekend when the two countries shattered trade, technology and security.
A senior Chinese official and trading reseller said on Sunday that the US could not use pressure to force a trade deal, refused to be drawn on if the leaders of the two countries were to meet at the G20 this weekend.
Standoff between the world's two largest economies goes beyond trade, with excitement high before the 30th anniversary of a bloody Chinese military rebellion against protesters around the Beijing Tiananmen Square (NYSE :).
China's Defense Minister Wei Fenghe warned the United States not to interfere in security disputes over Taiwan and South China Sea, after US Secretary of Defense Patrick Shanahan had said Washington would no longer "tiptoe" around Chinese behavior in Asia. [nL4N23908N]
"No one now believes that a decline le will be possible on the G20. It's going to be a long-term battle. Investors rushing to the safe assets, "said Mitsubishi's Fujito.
BEWARE OF THE BEARS  The gloomy economic outlook has prompted traders to increase efforts that the US Federal Reserve will cut interest rates faster than later.  The Fed Fund's currency futures are almost fully priced in two interest rate developments this year, one in September with more than a 50 percent chance of a move by July 30 to 31.
The 10-year US government bond yield fell to as little as 2 , 07 percent (), a level last seen in September 2017.
In the commodity markets, Brent oil futures () tumbled 1.8% to $ 60.86 a barrel, falling almost 20 percent since April. US-based futures () fell 1.3% also to below $ 53 a barrel for the first time since mid-February
futures in Shanghai () fell 0.5% to two-year decline, while the safety sea gold then jumped much as 0.5% to a 10-week high of $ 1,312.4 per ounce
The Mexican peso, struck by Trump's sudden threat on Friday to impose tariffs, recovered stability, traded 19.6266 to the dollar
Mexico President Andres Manuel Lopez Obrador suggested Saturday that the country could tighten migration controls to clear tensions with Trump, saying he expected "good results" from talks scheduled in Washington this week. [nL2N238078]