Economy

What A Yield Curve Inversion Means For Traders

What A Yield Curve Inversion Means For Traders

That pushed MSCI's all-country index down 0.4 percent.

Furthermore, in the credit markets, he highlighted the borrowing costs of high yield businesses had increased by over 1% and 0.25% for investment grade companies.

Japan's Nikkei fell 1.15 per cent and South Korea's KOSPI shed 1 per cent.

The pan-European STOXX 600 index lost 0.76 percent.

The moves follow similar declines in US bank shares, which dropped 4.4 per cent on Tuesday.

"If that is indeed to be the case, the recent strong equity recovery is at risk from fundamental economic deterioration, a message that is sounding from the junk bond market, whose rebound has been far less impressive", he said.

Following Wall Street's overnight tumble, S&P e-mini futures nudged up 0.4 percent in Asian trade on Wednesday.

On Tuesday, three-year Treasury yields fell below two-year notes for a brief moment before bouncing back.

President Donald Trump has been railing against the Fed's ongoing policy of gradually raising interest rates, complaining that it's slowing USA economic growth.

Such an inversion of two-year and 10-year yields, when 10-year bonds yield less than their two-year debt, has preceded every US recession in the past 50 years.

More news: Luis Valbuena, Jose Castillo Dead After Tragic Car Accident

If you've heard lately that the "yield curve" is inverting, your response might range from curiosity about what that portends for the US economy to, perhaps more likely, the kind of drowsiness brought on by arcane financial jargon.

Global stocks tumbled on Tuesday as a flattening Treasury yield curve sparked recession warnings, while optimism sharply waned that the United States and China would quickly resolve their trade dispute. That particular inversion has preceded every recession since the late 1970s.

If wages are rising at a quick pace, Fed members may be more apt to continue to hike interest rates to try to stay ahead of inflation. "That said, it is true that the economic outlook is murkier than before", said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management. British Prime Minister Theresa May suffered embarrassing defeats one Tuesday, the start of five days of parliamentary debate over her plans to leave the European Union.

The dollar steadied on Wednesday after it took a hard hit in the early reaction to recession concerns and the initial thaw in trade tensions between Washington and Beijing sapped demand for the safe-haven greenback.

Oil prices pared some gains as fears flared that demand would stall due to a trade war between the U.S. and China, and that Russian Federation remained a stumbling block to a deal to cut global crude supply.

If that inversion happens, investors should prepare for a potential US recession as soon as mid-2019.

Against a basket of six rivals .DXY , the dollar edged up 0.1 percent to 97.103, trimming this week's losses to 0.2 percent.

The threat of slowing economic activity also weighed on oil prices.

USA crude futures were down 1.7 percent at US$52.35 per barrel and Brent shed 1.75 percent to US$61.00 per barrel.


  • Fortnite Season 7 arrives with new Iceberg biome, Wraps and planes

    Fortnite Season 7 arrives with new Iceberg biome, Wraps and planes

    There's a tall hill to the south of the unnamed village in this area, and at the top is where you'll find the crown of RVs . The planes can be found scattered around the map, but there are only a couple of airstrips.
    How to Watch The Game Awards 2018: YouTube, Twitter, Twitch and More

    How to Watch The Game Awards 2018: YouTube, Twitter, Twitch and More

    The stream is viewable on MLG, Twitter , Twitch , Facebook , Mixer , Steam TV, PlayStation 4, and Xbox Live, and more. The games poised for the most awards include Red Dead Redemption 2 , God of War and Marvel's Spider-Man.

    Ever baby born from a uterus transplanted after death

    Until now, the only successful uterus transplants have involved living donors who are typically family members of the recipients. Upon encountering a suitable candidate and donor, doctors must act quickly to remove the uterus and transport it to the patient.
  • Jose Mourinho and Xabi Alonso reunion at Real Madrid on cards

    Jose Mourinho and Xabi Alonso reunion at Real Madrid on cards

    October's away leg was the first meeting between the sides, with Real Madrid winning 4-0. It seems to me that at that age it's more handsome because he can truly value it.
    How did an eel get stuck up a seal's nose?

    How did an eel get stuck up a seal's nose?

    The picture, which shows the seal looking surprisingly chill, has everyone amused. Fortunately, no harm to the seals was observed.
    Mika Singh arrested for alleged sexual harassment

    Mika Singh arrested for alleged sexual harassment

    Singer Mika Singh has been detained in United Arab Emirates on a sexual harassment complaint, according to news agency ANI . The Brazilian teenager has in her complaint to the police, stated that the singer has sent her inappropriate pictures.
  • Euro NCAP Crash Tests Two Virtually Identical Volvos, Gives Them Five Stars

    Euro NCAP Crash Tests Two Virtually Identical Volvos, Gives Them Five Stars

    The Panda, last tested in 2011, has now been comprehensively overtaken by rival superminis in the race for safety. The Panda follows the Punto as only the second vehicle to score zero stars under Euro NCAP assessment.
    HBO drops first teaser of Season 8

    HBO drops first teaser of Season 8

    If the result is dragonglass, it's worth noting that's one of the few ways White Walkers can be killed . The teaser was first shown at a " Game of Thrones " panel at Comic Con Experience (CCXP) in Brazil .
    John Bolton knew of Huawei arrest before Trump-Xi dinner

    John Bolton knew of Huawei arrest before Trump-Xi dinner

    In exchange, ZTE agreed to pay a hefty $1 billion fine and put an additional $400 million in escrow in case of future violations. FILE - People walk past a sign board of Huawei at CES (Consumer Electronics Show) Asia 2018 in Shanghai , China , June 14, 2018.
  • Tyler Perry pays off $434,000 worth of layaway at Atlanta WalMart stores

    Tyler Perry pays off $434,000 worth of layaway at Atlanta WalMart stores

    Tyler Perry is in the giving spirit this holiday season, as he just dropped $434,000 to pay off shoppers' layaways at Walmart . Perry's gesture applied to layaways that were already in the stores as of 9:30 a.m. local time on December 6.
    Cardinals acquire Diamondbacks slugger Paul Goldschmidt in blockbuster trade

    Cardinals acquire Diamondbacks slugger Paul Goldschmidt in blockbuster trade

    The quiet slugger was selected by Arizona in the eighth round of the 2009 draft and made his major league debut in 2011. Since then, he has compiled a.297 batting average with 209 home runs and 710 RBI. "We understand that.
    Merkel's Party Chooses Successor to Longtime German Leader

    Merkel's Party Chooses Successor to Longtime German Leader

    In a farewell speech as leader, Merkel said Friday that "our CDU today is different from the year 2000, and that is a good thing". Most controversially, she allowed large numbers of asylum-seekers into Germany in 2015.