The yield on the 10-year US Treasury note briefly slid below the yield on the two-year bond on Wednesday, a closely-watched benchmark that is often seen as a harbinger of recession.

The so-called “inversion” took place near 8pm Hong Kong time on Wednesday when the yield on the 10-year US Treasury slipped below the two-year at around 1.62 per cent.

US stocks have been under pressure in recent sessions as bond yields have gyrated, with analysts warning that sinking rates are a sign of a worsening medium-term and near-term economic outlook.

Analysts have warned that the grinding US-China trade war is denting sentiment as businesses hold off on capital spending amid uncertainty over the tariff picture.

At the same time, US indicators have continued to show solid labor and consumer conditions, and some leading analysts do not see a US recession as likely in the near-term.

On Tuesday, US President Donald Trump announced he was delaying new tariffs on some key consumer goods until December 15, a move that bolstered global equity markets.

On Wednesday, data showed Chinese factory output slowed to its lowest level in 17 years.

That came as Germany reported 0.1 per cent contraction in the second quarter. While overall activity was supported by rising household and government spending, falling exports weighed on manufacturers, statistics authority Destatis said.

The weakening data has fueled expectations that the leading central banks will undertake new stimulus measures. The Federal Reserve cut interest rates last month for the first time in more than a decade and is expected to make additional cuts in the months ahead. (AFP)