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(Adds comment, fresh prices) * Global shares slide as * Bonds rally on safety appeal, dollar backs away from highs * Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn * Graphic: World FX rates http://tmsnrt.rs/2egbfVh By Supply chain woes continued to fuel inflation and growth concerns as Cisco Systems Inc (CSCO) warned of persistant component shortages, pushing its shares down 13% to help drive the S&P 500 closer to bear market territory. Data showed factory output in the U.S. Mid-Atlantic region decelerated far more than expected in May with the business outlook for the six months ahead the weakest in more than 13 years, a regional Federal Reserve bank survey said. On Traders are looking for a catalyst that will turn the market
around as near-term bottom approaches, said "There's probably still enough fear among investors to see a few more downdrafts," he sad. "But I think we're starting to hit a point where prices seem more in line with economic conditions. We may shift from overwhelming pessimism to starting to look for hopefully some turns in the problems that we're facing." Goldman Sachs now estimates a 35% probability of a U.S. recession in the next two years, while Morgan Stanley's sees a 25% chance of one in the next 12 months. In yet another sign of rising prices, U.S. spot power and natural gas prices soared to their highest in over a year in some U.S. regions as Americans cranked up air conditioners to escape an early spring heatwave. MSCI's gauge of stocks across the globe shed 0.28% and the pan-European STOXX 600 index closed down a preliminary 1.46%. The yield on 10-year Treasury notes fell 5.6 basis points to 2.828%, after earlier hitting a three-week low of 2.772%. The dollar fell across the board to extend its pullback from a two-decade high, as most major currencies battered by the greenback's advance this year drew some buyers. The dollar index fell 0.925%, with the euro up
1.08% to The focus remained on what central banks will now do as they walk a tightrope of trying to regain control of inflation, which is now at 40-year highs in some countries, without causing painful recessions. "We will have to discuss what we can do together in our
respective areas of responsibility to avoid stagflation
scenarios," German finance minister Oil prices rebounded from earlier losses as Chinese
officials planned to ease restrictions in U.S. crude recently rose 0.39% to (Reporting by
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