A global stock sell-off is deepening with investors fleeing to safe havens

Investors on Monday turned to safe-haven assets as a global stock sell-off deepened, following weaker-than-expected U.S. jobs data at the end of last week.

The disappointing jobs report spurred investor fears that the Federal Reserve made a mistake last week when it kept interest rates unchanged, and that the world’s largest economy is headed toward a recession.

The stock sell-off has also been exacerbated by volatility in some of the major earnings and a more hawkish Bank of Japan, which has led to speculation that the popular yen “carry trade” has imploded over a short-term basis. A “carry trade” takes place when investor borrows in a currency with low interest rates, such as the yen, and reinvests the proceeds in a currency with a higher rate of return.

On Monday, the Swiss franc strengthened 1.7% against the dollar to trade at 1.186 against the greenback, hitting its strongest level since January this year.

U.S. Treasury yields, which move inversely to prices, extended their fall. At 8:50 a.m. ET, the yield on the 10-year Treasury was down by 11 basis points to 3.681%. The 2-year Treasury yield was last trading at 3.68% after tumbling by 20 basis points to a nearly two-year low. The yield on Japan’s 10-year government bond meanwhile plunged 21 basis points to 0.741%.

The buying was in sharp contrast to the selling seen in the stock markets. U.S. stock futures fell early Monday, with the Dow Jones Industrial Average futures declining by 1,150 points, or roughly 2.9%. S&P 500 futures and Nasdaq-100 futures dropped 4% and 5.4%, respectively.

Japan stocks confirmed a bear market in Asia overnight. The 12.4% loss on the Nikkei — which brought it to close at 31,458.42 — marked the worst day for the index since the “Black Monday” of 1987. The loss of 4,451.28 points on the index was also the largest decline in terms of points in its entire history.

In Europe, the regional Stoxx 600 index was 3.3% lower, with all sectors and major regional bourses trading in the red. Tech stocks shed as much as 5% before paring losses slightly to trade down 4%.

While U.S. recession fears appeared to trigger the start of the sell-off last week, Peter Schaffrik, global macro strategist at RBC Capital Markets, said wider factors should not be overlooked.

“When you look at the labor market report in a bit more detail, I think there are some legitimate concerns about whether it was actually as weak as it as it was stylized,” Schaffrik told CNBC’s “Squawk Box Europe” on Monday. Schaffrik added that the totality of recent U.S. data would still most likely lead the Federal Reserve to cut rates by 25 basis points in September, rather than opting for a bigger trim.

Schaffrik went on to say that the big movements in the yen should not be overlooked, while equity market wobbles…