GLOBAL MARKETS-Asia stocks take heart as Beijing limits yuan slide

* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Yuan fixed beyond 7 per dlr, but not as weak as feared
* Most Asian bourses bounce after recent sharp losses
* Recession talk fuels rush to bonds, curve inverts further
* Gold breaks $1,500 for first time in over 6 years
* Oil rallies on rumours of Saudi action on supply

By Wayne Cole
SYDNEY, Aug 8 (Reuters) - Asian shares were trying to rally
on Thursday after Beijing limited the fall in its yuan and
provided temporary relief from fears of a global currency war,
though worries about recession still lurked in the background.
China's central bank set its yuan midpoint beyond 7 to the
dollar for the first time since the global financial crisis, but
that was not as weak as many had expected. Markets reacted by taking back a little of their recent
hefty losses. MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS bounced 0.8%, but was still down
more than 7% over the past two weeks.
Japan's Nikkei .N225 added 0.6%, and away from seven-month
lows, while Chinese blue chips .CSI300 rose 0.9%. E-Mini
futures for the S&P 500 ESc1 edged up 0.26%.
Markets are now awaiting data on Chinese trade for July to
gauge how badly the tit-for-tat tariffs are hurting exports.
Investors have increasingly come to fear the trade war will
prove protracted enough to shove the world into recession, and
have piled into bonds and gold as a hedge.
"Financial markets are raising risks of recession," said
JPMorgan economist Joseph Lupton.
"Equities continue to slide and volatility has spiked, but
the alarm bell is loudest in rates markets, where the yield
curve inverted the most since just before the start of the
financial crisis."
Yields on U.S. 30-year bonds US30YT=RR dived as deep as
2.123% overnight, not far from an all-time low of 2.089% set in
2016. Ten-year yields US10YT=RR dropped further below
three-month rates, an inversion that has reliably predicted
recessions in the past. US/
The latest spasm began when central banks in New Zealand,
India and Thailand surprised markets with aggressive easings,
while the Philippines is expected to cut later on Thursday.
TO THE RESCUE?
"The decision by these APAC central banks to "go hard and
early" has provided further fuel to concerns of a global
recession," said Rodrigo Catril, a senior FX strategist at
National Australia Bank. "This also means that the Fed will need
to come to the rescue."
Chicago Fed President Charles Evans signalled on Wednesday
he was open to lower rates to bolster inflation and counter
risks to economic growth from trade tensions. Futures 0#FF: moved to price in a 100% probability of a
Fed easing in September and a near 30% chance of a half-point
cut. Some 75 basis points of easing is implied by January, with
rates ultimately reaching 1%. FEDWATCH Dire data on German industrial output stoked concerns Europe
might already be in recession and pushed bund yields deeper into
negative territory. All of which fuelled speculation that the major central
banks would also have to take drastic action, if only to prevent
an export-crimping rise in their currencies.
The Bank of Japan would be under particular pressure as its
yen has gained sharply from the flood to safe havens, leaving it
at 106.20 per dollar JPY= from 109.30 just a week ago.
The euro has also bounced to $1.1210 EUR= , from a two-year
trough of $1.1025, while the U.S. dollar index has backtracked
to 97.539, from a recent peak of 98.932.
New Zealand's dollar was still picking up the pieces after
sliding as much as 2.6% on Wednesday when the country's central
bank slashed rates by a steep 50 basis points and flagged the
risk of negative rates. The kiwi was huddled at $0.6462 NZD=D3 having shed 1.1%
for the week so far.
The rapid decline in yields helped lift gold above $1,500
for the first time since 2013. Spot gold XAU= was last at
$1,497.95 per ounce, having been as far as $1,510 on Wednesday.
The precious metal is up 16% since May. GOL/
Oil prices regained some ground as talk that Saudi Arabia
was mulling options to halt crude's descent helped offset a
build in stockpiles and fears of slowing demand. O/R
Brent crude LCOc1 futures climbed $1.59 to $57.82, though
that followed steep losses on Wednesday, while U.S. crude CLc1
rose $1.59 to $52.68 a barrel.

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(Editing by Jacqueline Wong)