LONDON (Reuters) – Global equity markets nudged down on Wednesday as investors hoped central bank action in the world’s biggest economies could temper some of the slowdown in global growth, despite bond yields still flagging recessionary fears.

European shares, which broke four straight days of losses on Tuesday, slipped 0.1 percent though bank shares enjoyed a near-one percent lift after European Central Bank Governor Mario Draghi signaled more assistance for banks via a cheap loans program.

German 10-year yields, already below zero percent since Friday, fell further into negative territory. The U.S. bond yield curve meanwhile remained inverted – three-month bills are yielding more than 10-year bonds – a key signal of recession which dampened appetite for risk.

The U.S. yield curve inversion, which has preceded every U.S. recession for the last 50 years, triggered a sharp stock selloff last week. The drop in yields picked up pace after the U.S. Federal Reserve signaled a halt to its rate increases.

Markets got a reminder of global growth risks after Chinese data showed industrial profits shrank the most since late-2011 in the first two months of the year. That came after lackluster economic data on Tuesday from Germany and the United States.

MSCI’s all-country world equity index, which tracks shares in 47 countries, slipped 0.1 percent while Chinese mainland shares bounced almost one percent as expectations deepened of more central bank stimulus.

“Our view is that the reflation story remains on track. We do expect the (Chinese) government to come to the rescue and provide some respite,” said Justin Onuekwusi, portfolio manager at Legal and General Investment Management.

“It feels to me that markets had priced in a lower-for-longer (interest rate) environment even before central banks. They had come a long way very quickly and now they are taking a bit of a breather. Global growth overall looks reasonably healthy, despite the slowdown,” he added.

Most market players agree recession fears were real but saw no clear sign of a huge slowdown, especially with interest rate rises receding. Draghi too said the euro area’s economic soft patch did not necessarily foreshadow a serious slump and the bank could further delay rate hikes if necessary.

“Most economic forecasts, including our own, are such that the second half of the year should see a cyclical pickup in activity – but the market is pricing something different,” said Peter Schaffrik, head of European rates strategy at RBC Capital Markets.

Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan nudged up 0.1 percent while Wall Street was set for a firmer open, futures signaled.

BRUISED KIWI

New Zealand’s central bank joined its peers in the United States and Europe by turning dovish – it flagged a possible interest rates cut, sending the kiwi dollar down as much as 1.6 percent to its lowest in 2-1/2 weeks.

The move also weighed on the Australian dollar.

“The market was taken by surprise by the dovish tone,” Thu Lan Nguyen, an analyst at Commerzbank said of the Reserve Bank of New Zealand. “Most central banks have turned dovish. Even those that hiked interest rates did it with a very cautious outlook on rates.”

The dollar index versus a basket of six major currencies was flat at 96.745, after modest gains overnight.

Questions over Brexit also limited moves for sterling, with investors awaiting fresh signs of Britain’s plan to leave the European Union.

Prime Minister Theresa May will address Conservative Party lawmakers, possibly to indicate a timetable for her departure, as she tries to win support for her twice-rejected Brexit deal as parliament prepares to vote on a variety of possible options.

Oil prices fell, reversing earlier gains, as further disruptions to Venezuela’s crude exports were offset by a report that U.S. inventories rose last week.

In emerging markets, there were renewed concerns over Turkey and Argentina where currencies have fallen sharply in recent days. The lira liquidity squeeze has sent overnight swap rates on lira to almost 500 percent.