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LONDON (Reuters) - The threat of a global trade war sent stock markets sliding and investors rushing for the safety of currencies like the yen and government bonds on Friday, after U.S. President Donald Trump announced tariffs on up to $60 billion of Chinese goods.

The German share price index, DAX board, is seen at the stock exchange in Frankfurt, Germany, March 21, 2018. REUTERS/Tilman Blasshofer

Another bruising week for stocks .MIWD00000PUS has left global equity markets heading for their first quarterly loss since early 2016 after a spike in volatility, nervousness about rising inflation and the specter of a trade war spooked investors enjoying a multi-year bull run.

European stocks fell at the open, with Germany's Dax .GDAXI down 1.6 percent, the French CAC 40 .FCHI 1.5 percent lower and Britain's FTSE 100 .FTSE 0.6 percent in the red.

That followed large falls in the U.S., with the S&P 500 .SPX shedding 2.5 percent, and overnight in Asia, where the Japanese Nikkei 225 .N225 was the biggest loser slumping 4.5 percent.

The MSCI World Index, down 3.4 percent since Monday, is on course for its worst week since early February when a spike in volatility sent markets into a tailspin.

Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China, although the measures have a 30-day consultation period.

China urged the United States to “pull back from the brink”, but investors fear Trump’s tariffs are leading the world’s two largest economies into a trade war with potentially dire consequences for the global economy.

China disclosed its own plans on Friday to impose tariffs on up to $3 billion of U.S. imports in retaliation against the U.S. tariffs on Chinese steel and aluminum products.

“The equity markets are getting clobbered, which is not that surprising with fears of a trade war breaking out,” said Paul Fage, a TD Securities emerging markets strategist.

With investors seeking out safer assets, many jumped into government bond markets in Europe and the United States.

U.S. 10-year Treasury yields US10YT=RR, which fell almost 8 basis points on Thursday, were set for their biggest two-week fall since September. In Europe, benchmark issuer Germany’s 10-year bond yield hovered close to 10-week lows struck a day earlier at around 0.52 percent DE10YT=RR and was on track for its biggest two-week drop since August, down 13 basis points.

FLIGHT TO YEN

Many investors also turned to the yen, a currency likely to benefit from a full-fledged trade war. The Japanese currency gained 0.3 percent against the dollar to 104.95 JPY= yen, the first time it has been below 105 since November 2016.

The Swiss franc, another currency bought in times of market uncertainty, rose 0.2 percent versus the dollar CHF=, although it remained flat against the euro EURCHF=.

The dollar .DXY

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