A dismal US jobs report and weak data from Brazil, China and the UK increased fears of a global slowdown. Markets ended a historic week yesterday with government borrowing costs plunging to all-time lows.

The US payrolls report for May recorded 69,000 new jobs for the month, against expectations of 150,000. Additional bad economic news sent benchmark bond yields for the US, UK and Germany to unprecedented levels.

Germany’s 30-year borrowing costs fell below Japan’s for the first time while Denmark became the first EU country to see its 10-year yields drop below 1 per cent. "This week has been a real game-changer. There is no good news anywhere," said Mark Schofield, global head of interest rate strategy at Citi. "The market is pricing in a much, much greater probability of one of two events in Europe: the break-up of the euro or fiscal union."

US data confirmed the recovery has lost momentum again and suggested the eurozone crisis has hurt hiring in America after similar slowdowns in 2010 and 2011. The unemployment rate rose from 8.1 per cent to 8.2 per cent, while the April jobs figure was revised down from 115,000 to 77,000.