LONDON (Reuters) – Calm returned to global markets on Tuesday, with gains on European and Asian bourses and a tick higher in benchmark bond yields helping to soothe nerves after a jarring few days dominated by worries of recession.

European shares were winning the battle to avoid a fifth day of losses [.EU], Wall Street futures were pointing higher [.N]and even Turkey’s lira seemed to have stepped off its latest rollercoaster ride.

However, the bond markets remained the main focus: 10-year German government bond yields remained below zero and key sections of the U.S. yield curve were still inverted, meaning short-term borrowing costs are higher than longer-term ones.

“The world is looking to fade the risk aversion caused by the inversion of the (U.S.) yield curve,” said Societe Generale strategist Kit Juckes, adding that it was in any case difficult to position for a hypothetical recession.

Overnight, MSCI’s broadest index of Asia-Pacific shares rebounded 0.2 percent after losing 1.4 percent in the previous session, though there were some eye-catching moves within that.

Japan’s Nikkei jumped 2.1 percent after recording its biggest drop since late December on Monday [.T], and India jumped more than 1 percent, though China’s blue-chip CSI300 index dropped more than 1 percent as trade war worries persisted. [.SS]

Wall Street’s main S&P 500, Dow and Nasdaq markets were also expected later to begin on a firmer footing, although the bond market also remained the main focus there, especially as housebuilding data came in slightly underwhelming. [.N]

Investors have been spooked by sharp falls in U.S. bond yields and an inversion of the U.S. Treasury yield curve, which is widely seen as an indicator of an economic recession.

The 10-year U.S. Treasury yield edged up to 2.442 percent, having shed 5 basis points on Monday and a whopping 17.5 basis points since the Federal Reserve last week ditched projections for raising rates this year.

“The U.S. yield curve continues to invert,” said Michael Every, Hong Kong-based senior Asia-Pacific strategist at Rabobank. “This is not a healthy sign, as bond-market watchers should know and equity-market obsessives should rapidly learn.”

FACTORING IN A RATE CUT

The Treasury Department will sell $113 billion in coupon-bearing supply this week, including $40 billion in two-year notes on Tuesday, $41 billion in five-year notes on Wednesday and $32 billion in seven-year notes on Thursday.

Investors will also be watching Fed policymakers scheduled to speak on Tuesday.

U.S. economic growth could be “pretty weak” in the first quarter but will likely be much closer to 2-2.5 percent for the rest of the year. However, a central bank pause is the responsible thing to do, Fed Bank of Boston president and CEO Eric Rosengren said at a conference in Hong Kong.

Fed funds rate futures are now fully factoring in a rate cut later this year, with about an 80 percent chance of a move priced in by September.

In the currency market, the fall in U.S. yields undermined the dollar’s yield attraction.

The euro dipped under $1.13 again, having gained a tad on Monday after some reassuring German data.

“We expect EUR/USD to stabilize around the current level of 1.13 and see a limited downside for the rest of week,” said currency strategists at ING.

The dollar was 0.5 percent higher versus the yen at 110.57 yen, having hit a 1-1/2-month low of 109.70 on Monday, while Britain’s pound climbed to $1.325 after lawmakers voted late on Monday to wrest further control of the Brexit process from Prime Minister Theresa May..

At the same time, two heavyweight eurosceptic lawmakers indicated on Tuesday that they could support May’s current EU withdrawal plan, which has already been heavily defeated twice in parliament, rather than risk Brexit being canceled altogether.

Among commodities, oil prices hovered below their recent four-month peaks, as the prospect of tighter U.S. crude supply was offset by concerns about a slowdown in global economic growth.

U.S. crude futures traded at $59.55 per barrel, up three-quarters of a percent on the day but below Thursday’s $60.39, which was its highest level since mid-November.

Brent futures were up 0.7 percent at $67.73 while safe-have gold was down a third of a percent at $1,317.60 having hit a one-month high of $1,324.60 on Monday.