Longstanding warnings from economists of global spillover from the US-China trade war appear to be materialising, with a trio of central banks springing surprise rate cuts on Wednesday and bond markets in retreat.
The bold monetary policy moves in India, New Zealand and Thailand came as industrial production in European powerhouse Germany fell back in June, adding to uncertainty in the eurozone compounded by the trade war.
US President Donald Trump has threatened to slap additional tariffs on Chinese imports, and China has now let its yuan currency fall through 7.0 against the dollar.
Trump, in a series of outbursts on Twitter, has demanded the Fed reply in kind even after the US central bank staged its first rate cut in a decade last week.
"'Three more Central Banks cut rates.' Our problem is not China..." he tweeted, attacking the Fed anew.
The Trump administration accuses Beijing of foreign exchange manipulation, fuelling fears of a currency war in addition to the trade battles.
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Yields on the benchmark US Treasury and German government bonds have been charting record lows in response, suggesting trouble ahead.
The price of gold, another asset like government bonds that is seen as a safe haven, rose above USD 1,500 per ounce for the first time since 2013.
"(Interest) Rates falling everywhere," analysts at Moneycorp wrote.
"They may not exactly be competing but the world's central banks all seem to be pointing in the same direction towards lower rates. In every case there is concern, to a greater or lesser degree, about the global economy."
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