And finally.... Wall Street has closed, with the main indices virtually unchanged.

A day that began with a rout in Asia, and a 3% tumble on the Nikkei has ended with the Dow Jones industrial average up 0.07%, or 17 points.

But traders will point instead to the bond market, where anxiety over a global slowdown has pushed Treasury yields lower again.

With parts of the US yield curve now inverted (investors getting a better return on short-dated rather than long-dated bonds), fears of a recession are building.

On that note, goodnight!

IMF chief Christine Lagarde has weighed in on the side of campaigners calling for tech giants to pay more tax.

In a speech in Washington, Lagarde says:

“An impetus for rethinking international corporate taxation stems from the rise of highly profitable, technology driven, digital-heavy business models.

“The ease with which multinationals seem able to avoid tax, and the three-decade long decline in corporate tax rates, undermines faith in the fairness of the overall tax system. The current international corporate tax architecture is fundamentally out of date.”

What a difference a year makes in the bond market...

Here’s our news story on the latest twist in the Sports Direct/Debenhams row.

John Colley, professor of practice at Warwick Business School, explains why Sports Direct is now considering a bid for Debenhams:

“Mike Ashley is aware his 29.9% shareholding has virtually no value and that is unlikely to change.

“What he wants is control. That is why he is now considering a fresh bid for the remaining shares.

Debenhams will very likely end up either with a successful Company Voluntary Arrangement or a Receivership.

“Ashley can certainly see ways of extracting value but he wants to ensure he captures as much of that value as possible. That might include selling himself the better parts of the business such as Magasin du Nord.

“The current lenders might prefer not to see Mike Ashley looking after their interests, especially as he already has his hands full with House of Fraser.

“However, to avoid that they have to find £200million and fend over any further bid from Sports Direct. The behind the scenes negotiation will be very interesting.”

The news that Sports Direct could bid for Debenhams comes just a few days after it offered £100m for its Danish stores.

Debenhams declined, despite being desperate for cash as it tries to restructure its business and lower its debt pile.

SPD has also offered a £150m loan, in return for making its boss Mike Ashley the CEO of Debenhams.

Wall Street is heading lower in late trading, with the Dow now down 90 points again.

Apple is the biggest faller, down 1.8% as it announces a new streaming service, games offering and credit card.

Chipmaker Intel is next, down 1.45%, followed by Walgreens Boots (-1.3%) and JP Morgan (-1.25%).

On the other hand, at least US and UK government debt offer a rate of interest.

More and more sovereign bonds are trading with negative yields, meaning investors are guaranteed to not get all their money back:

US government bond yields are also continuing to drop, providing more fuel for those concerned the yield curve is inverting [explainer here]

However..... Rick Rieder of investment giant BlackRock doesn’t agree that it heralds a recession.

Back in the bond market, the yield on UK government debt has hit its lowest level since autumn 2017.

Reuters has the details:

Brexit worries pushed Britain’s 10-year government bond yield below 1 percent for the first time in 18 months on Monday as the country’s still uncertain departure from the European Union added to concerns about global economic growth.

The 10-year gilt yield fell 3 basis points on the day to 0.981 percent, the lowest level since Sept. 8 2017.

In some ways, that’s good news for the government - it means it’s cheaper to borrow in the financial markets. But unfortunately, it’s also a sign that investors are more pessimistic about growth prospects, both in the UK and abroad.

After a choppy morning’s trading, the US stock market is back where it started. The Dow and the S&P 500 are both flat, although the Nasdaq is still lower (-0.2%).

Europe is still nursing losses, with the FTSE 100 down 40 points (-0.6%) in late trading.

Fiona Cincotta, analyst at City Index says the inversion of the yield curve for US government debt has worried traders:

The yield of the 3-month treasury topping its 10-year counterpart is often considered a warning for a recession. The last time this happened was pre the financial crisis in 2007. With recession warnings sounding, traders are growing increasingly nervous.

There is a definite uneasiness surrounding the state of the global outlook, which investors just can’t shake off. As a result, demand for risker assets has fallen sharply and we are seeing increased flows into safe havens, such as the Japanese yen and gold.

Anxiety over a global slowdown has pushed the US Dow Jones industrial average to a two-week low:

Back in New York, the sell-off is gathering pace.

The Dow is now down 93 points, or 0.4%, at 25,409, adding to the 460-points lost on Friday.

Back in London, the FTSE 250 index of mid-sized firms just hit a new six-week low, down 1.1% today.

Brexit anxiety can take the blame, along with worries about the global economy.

The sell-off deepened as the DUP Party announced that it still opposed Theresa May’s Withdrawal Agreement, meaning little chance that the third Meaningful Vote on the deal will go better than the first two.

Ding ding! Wall Street has opened for a new week, and shares are dipping.

The S&P 500 index lost 4.9 points, or 0.17%, in early trading, while the Dow Jones industrial average has dropped by 28 points or 0.1% -- having lost 1.7% in Friday’s rout.

Traders will be taking some comfort from the rise in German business confidence, but concerns of a looming recession haven’t evaporated.

The drop in longer-term US bond yields (‘inverting the yield curve’, such that 10-year debt carries the same interest rate as three-month bonds), continues to eat away at Wall Street confidence.

Esty Dwek, senior investment strategist at Natixis Investment Managers, explains:

• The 3-month to 10-year portion of the US yield curve finally inverted on Friday.
• While we expected the long end of the curve to hold up better, disappointing economic data on Friday led to a sharp drop in longer duration Treasury yields. Coupled with the expectation that the Fed’s announced pause will be followed by a cut rather than a further hike, this lead the curve to invert.
• Equity markets corrected on increased recession fears, as data deteriorated and an inverted curve has often been the precursor to a recession, albeit with a 12-18 month lag.

Things may be bad now for Germany’s factories, but a no-deal Brexit would make things much worse.

So argues Neil MacKinnon, Global Macro Strategist at VTB Capital:

“The fact that the German manufacturing sector is in trouble shows how the downturn in global trade is affecting a key exporting economy (the PMI index is at a 79-month low). The same applies in Japan, where the latest PMI index for the manufacturing sector highlighted that new export orders are decreasing at a faster rate.

A ‘no-deal’ Brexit shock would make things worse for German exporters, given the trade surplus with the UK in goods.”

According to the Office for National Statistics, Britain ran a £31bn trade deficit with Germany, buying nearly twice as much as it sold to Europe’s largest economy.

]This may explain why Angela Merkel took a softer line over Brexit than some other leaders (Oui toi, Monsieur Macron) at last week’s summit.

Here’s some more analyst reaction to the German confidence data:

European stock markets are heading south again.... proving that it takes more than one decent blob of economic data to raise spirits.

The blue-chip FTSE 100 index is down 50 points as lunch approaches, a drop of 0.7%. Packaging firm DS Smith (-3.3%), equipment rental firm Ashtead (-3%) and jet engine maker Rolls-Royce are the top fallers.

Britain’s FTSE 250, which contains mid-sized companies with a greater UK focus, has shed 1%, hitting its lowest level since February 13.

Germany’s DAX is now down 0.2%, while France’s CAC is down 0.25% -- a small drop, but on top of Friday’s tumble.

The pick-up in German business confidence, though welcome, hasn’t dispelled worries about the world economy.

Plus, the fact German factory bosses are gloomier has highlighted the weakness in global manufacturing - particularly in the eurozone.

James Athey, senior investment manager at Aberdeen Standard Investments, says:

“There’s a pretty obvious weakness in growth and markets need to come to terms with that.”

In other news, UK satellite operator Inmarsat has fallen to a takeover offer, ending a spirited battle to remain independent.

Back on terra firma, wine operator Majestic is planning to shut stores and rebrand itself as Naked Wine (which it acquired a couple of years ago).

The pound continues to be jolted around by the latest Brexit developments.

Sterling is down almost half a cent at $1.317 this morning, as MPs prepare to vote on whether to “take control” of the process (and Theresa May faces her cabinet).

The European Commission has piled more pressure on the UK, warning that it is “increasingly likely” to leave without a deal.

In a “no-deal” scenario, the UK will become a third country without any transitionary arrangements. All EU primary and secondary law will cease to apply to the UK from that moment onwards. There will be no transition period, as provided for in the Withdrawal Agreement. This will obviously cause significant disruption for citizens and businesses.

In such a scenario, the UK’s relations with the EU would be governed by general international public law, including rules of the World Trade Organisation. The EU will be required to immediately apply its rules and tariffs at its borders with the UK. This includes checks and controls for customs, sanitary and phytosanitary standards and verification of compliance with EU norms. Despite the considerable preparations of the Member States’ customs authorities, these controls could cause significant delays at the border. UK entities would also cease to be eligible to receive EU grants and to participate in EU procurement procedures under current terms.

Similarly, UK citizens will no longer be citizens of the European Union. They will be subject to additional checks when crossing borders into the European Union. Again, Member States have made considerable preparations at ports and airports to ensure that these checks are done as efficiently as possible, but they may nevertheless cause delays.

The EC has just issued new guidance for firms and individuals, explaining what happens in a no-deal scenario.

European stock markets have recovered some of their earlier losses, thanks to the rise in German business confidence...

...however Ken Odeluga of City Index fears further losses ahead.

Here’s IFO president Clemens Fuest’s take on Germany’s economy, based on its survey of German business leaders:

In manufacturing the business climate weakened once again. The manufacturers assessed their current business somewhat less positively. The outlook also worsened. The expectations component fell to its lowest value since November 2012. With declining demand, businesses hardly expect any more increases in production.

In the services the index rose noticeably, mainly as a result of clearly more optimistic expectations. The service providers gave more positive assessments to their already favorable business situation.

In trade the business climate improved. Appraisals of the current situation rose to their highest level since May 2018. Also the business expectations brightened. Especially the retailers reported a very good current situation.

In construction the business climate index rose, after a weakening trend in past months. This was the result of a clearly improved current business situation. The outlook remains largely unchanged.

The IFO Institute predicts that Germany’s economy will only grow by 0.6% this year.

That would be rather weak by historical standards, and follow on from a disappointing performance in 2018 -- no wonder investors are worried about the global economy!

The Brexit crisis is hurting German manufacturing, warns IFO economist Klaus Wohlrabe.

Wohlrabe says the uncertainty over Britain’s departure helps explain why factory morale keeps falling, even as other sectors become cheerier.

“Brexit uncertainty is particularly hitting the industrial sector. The other sectors don’t appear to be affected.”

It’s not all good news, though.

The IFO Institute points out that German factory bosses are even gloomier than a month ago, reflecting worries over trade war and Brexit.

Shares are recovering in Frankfurt, as investors welcome the pick-up in German business confidence:

Carsten Brzeski of ING believes Germany’s economy could be turning a corner, now that business morale is picking up.

Today’s Ifo index ends a period of pessimism and suggests that not all is bad in the German economy. With some (technical) rebounds in industrial production in February and March, the first quarter for the German economy might not be as weak as some have expected.

In our view, the solid domestic fundamentals, low-interest rates and a weak euro, still argue in favour of a rebound, mainly on the back of investments, consumption and some relief from the global risk factors. At the same time, however, the risk of a self-enhancing negative sentiment loop is increasing by the month.

Brzeski also singles out problems in Germany’s car industry, and Brexit, as one-off factors that are hurting the economy, adding:

To paraphrase ECB president Mario Draghi’s words - the German economy is somehow still caught in a dark room. A dark room, in which all of a sudden someone can easily switch on the light, and everything will be fine, or a dark room, in which the search for the exit door could still take a while.

Despite March’s recovery, German business confidence is still quite low - as this tweet from economist Ulrik Harald Bie shows.

Wall Street is expected to join the selloff when trading begins in four and a half hours.

Dow Jones futures are down 0.3%, while the Nasdaq is being called down 0.6%.

Also...it’s not like the bond market has some hidden super-powers....

Gold is benefitting from the dash out of risky assets today.

The gold price has risen to $1,316 per ounce, up $3.6 or 0.25%, on track for its highest close since the end of February.

There’s a problem with using the US yield curve as an economic indicator -- QE.

The massive bond-buying programmes run by central banks since the financial crisis have moved bond prices, making it harder to say whether the price of a particular security accurately reflects economic and financial fundamentals.

But as this tweet shows, the yield on US 2-year, 5-year and 10-year bonds are all below the three-month yield. That suggests anxiety about US economic prospects:

A sea of red ink is seeping across Europe’s main stock markets.

It’s not a major sell-off at this stage, but Germany’s DAX has hit its lowest level in almost 6 weeks.

European stock markets have also joined the selloff.

The Stoxx 600, which tracks the biggest companies across Europe, has shed 0.6% in early trading.

Neil Wilson of Markets.com predicts more turmoil ahead:

Investors should be prepared for a tough week as we close out March and the first quarter. Global stocks have taken a battering in the last couple of sessions as bond yields have sunk across the board. The slide in yields last week was a red flag for equities; the bond market loudly proclaiming that it’s not confident about the growth outlook.

The bond market has been trying to speak for a while now but it’s been shouted down by the equity market rally – until now. Although allocations were suggestive of a lack of animal spirits driving the rally as investors were long low growth/low inflation plays, and short inflation/growth.

Things could get worse from here. Bond yields are the worry here – the US 10yr has fallen to 2.44%, while bunds are negative again. Across the piece global bond yields are faltering. On Friday the market paid attention as the 3m-10yr yield inverted – this was a big flashing warning light.

Britain’s FTSE 100 has dropped 41 points at the start of trading to 7167. That’s a 0.5% decline, following Friday’s 2% tumble.

Most shares are down, with technology stocks, miners and industrial groups leading the selloff.

Jasper Lawler of CMC Markets says America’s central bank, the Federal Reserve, has spooked investors with some unexpectedly cautious forecasts last week:

Concerns over the health of the US economy sent Wall Street sharply lower on Friday, with all three main US indices recording the worst session since January 3rd. After the Fed doubled down on dovish rhetoric, US treasury yields inverted for the first time since 2007 on Friday.

An inverted yield curve, the 10-year yields falling below the 3-month yield, has in the past signalled a recession. The last inversion was in 2007. With the recession warning bell blaring, investors will struggle to justify buying into riskier assets right now.

And its not just the US, global economic slowdown fears were exasperated on Friday by German manufacturing output figures, which contracted for a third straight month in February. Whilst data from the rest of the eurozone also served to deepen global recession concerns.

Jim Reid of Deutsche Bank says the risks of a US recession next year are rising, following the collapse in bond yields in recent days.

We don’t care why the curve inverts but instead think that in a capitalist economy like the US, animal spirits - and with it economic growth - are very linked to the steepness of the curve.

Before last week, our view was that the curve may invert in the second half of 2019 and elevate the risks of a recession in the second half of 2020. However, the move over the last few days increases the risks of both arising earlier even if we haven’t yet changed our view.