Stocks and oil prices have dipped after weak US consumer data rekindled global recession worries, while Japan's yen reared up again as traders took fresh punts that the Bank of Japan will soon be tightening policy.
An early 0.5 per cent slide in Europe on Thursday after a bad day for the Nikkei meant the all-world share indices were facing their first three-day losing streak of the year.
Wall Street futures were pointing down 0.3 per cent, while Benchmark 10-year US Treasury yields, which tend to drive global borrowing costs and fall when bond prices rise, hit their lowest since September.
Oil prices dropped back over one per cent after a 10 per cent rally this year and industrial metal copper skidded from a six-month high that has been fuelled by resource-hungry China abandoning COVID-19 restrictions.
"We actually think that the recession and the corporate earnings season that we are just at the start of ... are going to weigh on the markets," Close Brothers Asset Management chief investment officer Robert Alster said.
"The retail sales data from the US and places like the UK are going to be a bit weak for a while," he added. "But never ever underestimate the US consumer, that is an import investment rule. Let's see a few more months (of data)."
In the currency markets, the yen rose 0.7 per cent to 127.95 per dollar, unwinding some of its drop the previous day when, to the surprise of markets, the Bank of Japan (BOJ) stuck firmly to its approach of ultra-low interest rates.
The BOJ has pursued super-easy policy settings for decades in an attempt to generate inflation and growth, but there are doubts it can keep that up, and traders have been selling Japanese government bonds and buying yen to bet on a shift.
"There's an intense amount of speculation in the market that now that the January (BOJ) meeting has happened without any changes ... that we'll see something in March," said Shafali Sachdev, head of FX, fixed income and commodities in Asia at BNP Paribas Wealth Management in Singapore.
April was another possibility, she added, since by then the BOJ would have a new governor.
Speculators did, however, give some respite to the BOJ in the bond market. After four days of huge BOJ spending to reel 10-year yields back inside the target band of 0.5 per cent either side of zero, the yield held at 0.41 per cent on Thursday.
In Europe, there was plenty going on too.
European Central Bank president Christine Lagarde is due to speak at the World Economic Forum in Davos, and minutes from last month's ECB meeting are due later on Thursday.
Meanwhile, Dutch ECB policymaker Klaas Knot, a noted hawk, was already out saying markets should take more seriously its guidance of rates rising in multiples of 50 basis points.
Norway's crown ticked higher as its central bank kept its interest rates at 2.75 per cent as widely expected, but said they were likely to go up in March.
On Wednesday, the S&P 500 had lost 1.6 per cent after data showed US manufacturing output had slumped last month and retail sales had fallen by the most in a year.
The US dollar wound back London-trade losses in the New York session and made gains in Asia. The Australian dollar was down 0.75 per cent at $US0.688, losing ground after data showed an unexpected fall in Australian employment last month.
The euro was under gentle pressure at $US1.081, and the New Zealand dollar took news of Prime Minister Jacinda Ardern's surprise resignation largely in its stride, but was pressured by broader US dollar buying to last sit one per cent lower.