Asia shares dragged by Wall St dive, bonds bullish

Wayne Cole - Reuters - 09/09
Asian share markets slid on Monday after worries about a possible U.S. economic downturn slugged Wall Street, while dragging bond yields and commodity prices lower as investors avoided risk assets for safer harbours.
  • Asian stock markets :
  • Nikkei falls 2.4%, S&P 500 futures go flat
  • Bonds supported by recession risk, shift from equities
  • ECB seen cutting 25bp on Thursday, Fed the same next week
SYDNEY, Sept 9 (Reuters) - Asian share markets slid on Monday after worries about a possible U.S. economic downturn slugged Wall Street, while dragging bond yields and commodity prices lower as investors avoided risk assets for safer harbours.
Japan's Nikkei (.N225), opens new tab bore the brunt of the early selling as a stronger yen pressured exporters, losing 2.4% on top of a near 6% slide last week.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab slipped 0.6%, after losing 2.25% last week.
S&P 500 futures and Nasdaq futures were both a fraction lower, after Friday's slide.
Fed fund futures were little changed as investors wondered whether the mixed U.S. August payrolls report would be enough to tip the Federal Reserve into cutting rates by an outsized 50 basis points when it meets next week.
So far, markets imply only a 29% chance of a large cut, in part due to comments from Fed Governor Christopher Waller and New York Fed President John Williams on Friday, though Waller did leave open the option of aggressive easing.
"Our read of the data is that the labour market continues to cool, but we see no sign of the kind of rapid deterioration in conditions that would call for a 50bp rate cut," Barclays economist Christian Keller said.
"Importantly, we also see no indication of any appetite for this in Fed communications," he added....
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