By Yoruk Bahceli and Dhara Ranasinghe

Aug 9 (Reuters) - Disappointing U.S. jobs data has

shaken confidence in a soft landing for the world's largest

economy, sending global equity markets tumbling and bets on

interest rate cuts surging.

But investors abandoning a popular yen carry trade has

played a big role in the selloff, complicating the message from

asset prices on the economic outlook.

The likelihood of a recession is anyone's guess. Goldman

Sachs has raised its odds of a U.S. recession to 25%. JPMorgan

sees a 35% chance of one starting before year-end.

Here is what five closely-watched market indicators say

about global recession risks:

1/ DATA PUZZLE

The U.S. unemployment rate jumped near a three-year high of

4.3% in July amid a significant slowdown in hiring.

It fanned recession fears by reaching a trigger point of the

"Sahm rule", which has shown historically a recession is

underway when the three-month rolling average unemployment rate

rises half a percentage point above the low of the prior 12

months.

Still, many economists reckon the reaction to the data was

overblown given the numbers may be skewed by immigration and

Hurricane Beryl. Better-than-expected jobless claims data on

Thursday also supported that view, sending stocks rallying.

"Payrolls are still growing. If you started to see payrolls

turn negative, that would make me much more concerned that a

genuine recession is starting," said Dario Perkins, managing

director, global macro at consultancy TS Lombard.

The U.S. economy grew 2.8% in the second quarter on an

annualised basis, double the first quarter rate and on par with

the pre-pandemic average. Services activity also points to

growth continuing.

Beyond the United States, however, business activity

indicators point to faltering euro zone growth, while China's

recovery remains fragile.

Global economic data is delivering negative surprises near

the highest rate since mid-2022, Citi's surprise index shows

.

2/ CORPORATE ROUT

MSCI's global stocks index is down more than

6% from July's record highs, while the U.S. S&P 500 has lost

over 4% so far in August.

Yet analysts reckon stocks, which are still up around 7%

globally this year, are far from signalling a recession.

Goldman Sachs estimates that every further 10% selloff in

U.S. equities would reduce growth over the next year by just

under half a percentage point.

Credit conditions could prove more important, analysts say.

They note that although the risk premium corporate bonds pay

over government bonds has widened in Europe and the United

States, it was correcting from historically tight levels and

moves were not yet pronounced enough to suggested recession

risks were high.

Recession expectations implied by the gap between U.S.

investment grade bond and Treasury yields are about half as high

as they were in 2022-2023, according to BofA.

3/ CUT AWAY

Spurred on by the U.S. jobs data and a dovish-sounding

Federal Reserve, traders now price in around 100 basis points of

cuts in U.S. rates by year-end.

That is down from over 130 bps earlier this week, but double

the roughly 50 bps anticipated on July 29. Markets also price in

more than a 50% chance of a hefty 50 bps September cut.

Major banks have also added to the Fed cuts they expect this

year.

Steve Ryder, portfolio manager at Aviva Investors, said the

Fed was likely to cut rates three times this year, but given

uncertainty around how economic data evolves, it was

understandable that markets were pricing the probability that it

would have to cut more.

Elsewhere, traders see a high chance of three more European

Central Bank rate cuts this year, having seen less than a full

chance of a second cut in mid-July.

4/ YIELD CURVE

Rate cut bets have sent shorter-dated U.S. Treasury yields

tumbling and the closely-watched part of the yield curve that

tracks the gap between 10-year and 2-year Treasury yields

turned positive for the first time since July

2022 on Monday.

While a yield curve inversion has historically been seen as

a good predictor of a recession on the horizon, the curve tends

to revert back to normal as the recession nears.

However, with the curve inverted for a record time this

cycle with no recession materialising, a majority of strategists

Reuters polled earlier this year no longer see it as a reliable

recession indicator.

The curve has inverted back since, standing at minus 5 basis

points on Thursday.

5/ DR COPPER

Known as "Dr Copper" for its track record as a boom-bust

indicator, the metal's fall to 4-1/2 month lows this week puts

it firmly on the recession watch list.

Trading at around $8,750 a metric ton, three-month

London Metal Exchange copper prices have slumped roughly 20%

from a record high scaled in May, reflecting pessimism about the

global economic outlook.

Oil prices, another barometer of the health of

global demand, are near multi-month lows. But their fall has

been limited by worries that Middle East tensions could squeeze

supplies from the largest oil producing region.