The spread between 3-month and 10-year Treasury yields – a relationship known as the yield curve – inverted to its widest level since 2007 on Monday. Yield-curve inversions has long been watched for hints of an impending recession, and this is the latest signal that an economic downturn could be […]
The signals for an upcoming recession are now all flashing at the same time. The Federal Reserve’s first cut to interest rates since 2008 did not change the yield curve (the margin between short- and long-dated US Treasury yields). The yield curve has inverted before every US recession for the […]
Government bonds are the top crowded trade for global fund managers, according to a survey conducted by Bank of America Merrill Lynch. Fears over trade tensions have driven investors to havens like Treasurys, which are viewed among the safest assets in the global marketplace. The long US Treasury trade beat […]
Global markets fell on Wednesday as traders feared further escalation in the US-China trade war. State-aligned newspapers warned China is prepared to cut off supplies of rare-earth metals. “We advise the US side not to underestimate the Chinese side’s ability to safeguard its development rights and interests,” one editorial read. […]
China has run a small-scale test of the “nuclear option” in its trade war with the US by selling $US20 billion of US government debt. If China sold its $US1.2 trillion in US Treasurys, it could raise America’s borrowing costs, weaken the US dollar, and plunge global markets into chaos. […]
Real US bond yields – defined as the current yield adjusted for inflation – have risen sharply over the past month. Real US 10-year rates are now above 1%. Janus Henderson analyst Ash Alankar said if they approach real GDP levels of 1.5-2%, the “impact will be meaningful”. Financial modeling […]
The bond market is about to have a wicked...