GLOBAL MARKETS-Stocks under pressure as bond markets ring recession alarms

* MSCI world equity index falls 0.1%
* European stocks down 0.6%
* UK PM Johnson plans to cut parliamentary time before
Brexit
* Sterling falls 1%, UK stocks up 0.3%
* Gold, silver in demand; Japanese yen stands tall
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Updates prices thoughout, adds details on sterling, UK stocks)
By Tom Wilson
LONDON, Aug 28 (Reuters) - World stocks slipped on Wednesday
as a deepening inversion of the U.S. bond yield curve a day
earlier reignited worries over the possibility of recession,
sending investors towards perceived safe-haven assets from the
Japanese yen to gold.
The U.S. yield curve inverted on Tuesday to levels not seen
since 2007, stoking a sell-off on Wall Street. An inversion of
the yield curve - where yields on shorter-dated debt are above
those on longer-dated paper - has historically been a highly
accurate predictor of a U.S. recession.
MSCI's world equity index .MIWD00000PUS , which tracks
shares in 47 countries, fell 0.1%, dragged down by European
shares. The broad Euro STOXX 600 .STOXX fell 0.6%, with
bourses in Paris .FCHI and Frankfurt .GDAXI tumbling 0.6%
and 0.7% respectively.
However, UK stocks bucked the trend .FTSE , turning
positive to gain 0.3% as sterling dived 1% on Prime Minister
Boris Johnson's move to restrict parliamentary time before
Britain's planned departure from the European Union.
Johnson will limit parliament's ability to derail his Brexit
plans by unveiling his new legislative agenda on Oct. 14, a
government source told Reuters, stoking fears of an economically
disruptive no-deal departure from the EU. The pound, already trading lower on the day, was last down
0.6% at $1.2210.
Still, Wall Street futures gauges NQcv1 EScv1 suggested
U.S. stocks would show more resilience, forecasting gains of
around 0.2%.
"It's become very difficult for investors to garner an idea
of where we go to next," said Michael Hewson, chief market
strategist at CMC Markets. "The weakness in bond yields and the
strength in havens speaks to an investor that is becoming
increasingly risk-averse."
The 10-year Treasury yield US10YT=RR had fallen on Tuesday
to around 6 basis points below the two-year yield US2YT=RR ,
with the 10-year yield close to three-year low touched on
Monday.
Longer-dated bond yields also fell. The U.S. 30-year
Treasury yield US30YT=RR slumped to a record low of 1.906%,
and was last down 6 basis points on the day.
Some investors said market fears of a looming recession,
would further support expectations that the U.S. Federal Reserve
would cut interest rates further - something they warned is not
a foregone conclusion.
Federal funds futures FEDWATCH implied traders saw a 91%
chance of a 25 basis point rate cut by the U.S. central bank
next month, and a 100 basis point cut within 2020.
"The market is pricing another 100 basis points cut from the
Fed by next year, but the Fed seems rather reticent to follow
where the market is indicating it should go," said Peter
Schaffrik, head of European rates strategy at RBC Capital
Markets.
The renewed fears of a global economic slowdown bolstered
demand for assets perceived as safe havens.
Gold XAU= turned positive after starting the day in the
red, and was last flat at $1,542.91. Silver XAG= gained 1.2%,
putting it on course for its fourth straight day of gains.
In currencies, the Japanese yen kept a grip on its recent
gains. The yen, seen as a safe haven in part because of Japan's
large trade surplus and a tendency for domestic investors to
repatriate money in times of market turbulence, traded at 105.78
per dollar JPY=EBS . It held its gains from the previous day,
when it advanced 0.35% to a 7-month peak.
The dollar index, which measures the greenback against a
basket of currencies, gained 0.1% to 98.094 .DXY . Currencies
that tend to perform well when investors buy into riskier
assets, such as the Australian AUD=D3 and New Zealand NZD=D3
dollars, fell.
For Reuters Live Markets blog on European and UK stock
markets, please click on: LIVE/

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U.S. Yield Curve http://tmsnrt.rs/2zUqXiW
World FX rates in 2019 http://tmsnrt.rs/2egbfVh
GBP moves https://tmsnrt.rs/2PlDRiw
EXPLAINER-Countdown to recession: What an inverted yield curve
means ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>