GLOBAL MARKETS-Bond yields ease again as flight to safety continues

* U.S. stocks mostly lower in early afternoon trading
* Oil prices down in volatile trading
* Bond price rally drives yields lower

(Updates to early afternoon U.S. market activity)
By Caroline Valetkevitch
NEW YORK, June 3 (Reuters) - A flight to safe-haven assets
pushed U.S. Treasury yields to their lowest since September 2017
on Monday, while gold prices jumped more than 1%.
A gloomy economic outlook is prompting traders to increase
bets that the U.S. Federal Reserve will cut interest rates
sooner rather than later. Markets appeared to price in higher
chances of recession and rate cuts by the Fed and other central
banks.
Investors have also been seeking protection from market
volatility as trade conflicts between the United States and its
trading partners have deepened. Yields on U.S. two-year notes US2YT=RR were on track for
their biggest two-day fall since 2008, and U.S. benchmark
10-year Treasury yields US10YT=RR earlier hit 2.071%, their
lowest since September 2017. German government bond yields fell
to an all-time low.
"What the bond market is telling us is that all of these
pressures put together create a likely economic slowdown which
is pushing yields down," said Eric Kuby, chief investment
officer, North Star Investment Management Corp in Chicago.
Treasury yields briefly extended their decline following
remarks from St. Louis Federal Reserve President James Bullard
who said a U.S. rate cut may be "warranted soon" because of
global trade tensions and weak U.S. inflation. In addition to increasing tariffs on Chinese imports in
recent weeks, the White House has hardened its stance toward
other countries, including Mexico.
Factory activity slowed in the United States, Europe and
Asia last month, while the escalating trade war between
Washington and Beijing raised fears of a global economic
downturn and heaped pressure on policymakers to step up support.
The U.S. dollar fell to a 4-1/2-month low earlier against
the Japanese yen and a two-month low against the Swiss franc.
The dollar index .DXY fell 0.54%, while the Japanese yen
strengthened 0.37% versus the greenback at 108.13 per dollar.
Nonetheless, an index of global stocks mostly edged higher
on Monday after a volatile May that wiped $3 trillion off global
equities.
On Wall Street on Monday, stocks were mixed, with the S&P
500 down slightly and Nasdaq falling after regulatory fears sent
shares of internet giants Alphabet, Facebook and Amazon.com
sharply lower. "The concerns that the government is going to get involved
and possibly break these companies up or impose fines on their
operations is a major concern here," said Robert Pavlik, chief
investment strategist and senior portfolio manager at SlateStone
Wealth LLC in New York.
The Dow Jones Industrial Average .DJI rose 26.97 points,
or 0.11%, to 24,842.01, the S&P 500 .SPX lost 4.06 points, or
0.15%, to 2,748 and the Nasdaq Composite .IXIC dropped 93.91
points, or 1.26%, to 7,359.24.
The pan-European STOXX 600 index .STOXX rose 0.39% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.28%.
In commodities, spot gold XAU= added 1.4% to $1,323.60 an
ounce, while U.S. crude CLcv1 fell 0.39% to $53.29 per barrel.

RISING TENSIONS, FALLING ACTIVITY
On Monday, the Institute for Supply Management said its
gauge of U.S. manufacturing activity unexpectedly fell in May to
the weakest level in more than 2-1/2 years amid global trade
tensions. The standoff between China and the United States, the two
largest economies, goes beyond trade, with tensions running high
ahead of the 30th anniversary of a bloody Chinese military
crackdown on protesters around Beijing's Tiananmen Square.

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Korea exports https://tmsnrt.rs/2Kn47VJ
Messy May for global markets https://tmsnrt.rs/2WJboFV
US 2-year yield in biggest two day fall since 2008 crisis https://tmsnrt.rs/2WFaY3b
Asian stock markets : https://tmsnrt.rs/2zpUAr4
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