Stocks shiver, bonds surge on Trump's Mexico threat

Safe-haven sovereign bonds surged and European stocks tumbled on Friday as investors feared President Donald Trump’s shock threat of tariffs on Mexico risked tipping the United States into recession while disappointing China data added to the woes. The yield on Germany’s 10-year government bond - regarded as one of the safest assets in the world - fell to a record low while U.S. yields slipped to near multi-year troughs. Markets also moved aggressively to price in deeper rate cuts by the Federal Reserve in 2019, parts of the curve inverted further, seen as a warning signal for recession in the world’s largest economy. Washington will impose a 5% tariff from June 10, which would then rise steadily to 25% until illegal immigration across the southern border was stopped. Trump tweeted the decision late Thursday, catching markets completely by surprise.