My read is that global investors were so focussed on the US debt ceiling debacle that they weren't really paying attention to any other rumblings in the global economy. Basically, most of the data out over the past two weeks has been shite (particularly confidence, labour market and consumption stuff - manufacturing appears to be holding up quite well) and they are now playing catch up. Ofcourse, I don't really like using financial markets as a guide, but when three things happen in concert: yield curves invert, stocks fall heavily and currencies move a lot; somethings up. Japan also unilaterally intervened to weaken its currency this morning (evening), with the finance minister saying he had "contacted other central banks to discuss the possibility of intervention, and after which decided Japan could only act unilaterally (ie, noone else liked the idea)".
My worry is that US payroll data due out tomorrow will potentially be the tipping point (there it is again); good data and this might all blow over for now, bad data and things could get ugly next week.
Couple that with continued unrest in MENA, Italian and Spanish yields pushing into danger territory and a Chinese government focused on bringing prices under control. To be honest, we might have a bit of Three Stooges Syndrome at the moment.