Danger of Recession in 2020 Revitalized by Coronavirus Outbreak; US Yield Curve Inversion Deepens as Enterprise Exercise Contract
Danger of Recession in 2020 Revitalized by Coronavirus Outbreak; US Yield Curve Inversion Deepens as Enterprise Exercise Contracts
- Recession threat is again on the rise and largely attributable to anticipated financial influence from the coronavirus outbreak
- An inverted US Treasury yield curve suggests draw back dangers confronted by the financial system nonetheless loom and will immediate the Fed to chop charges once more
- The US Dollar has crumbled since notching a three-year excessive as preliminary Markit PMI information for February confirmed US enterprise exercise contracted to a 76-month low
Odds that the US financial system will quickly slip right into a recession are doubtless again on the rise. This follows our prior US Recession Watch that highlighted a downshift in recession possibilities and the US-China trade war late final yr.
Now, because the coronavirus hits confidence and sends a shockwave throughout the worldwide provide chain, financial information is beginning to deteriorate quickly.
A dark Markit PMI report simply revealed that US enterprise exercise – notably within the companies sector – contracted throughout February.
US recession odds have been rekindled in response, which is mirrored by the abrupt pivot decrease within the US Dollar Index alongside a deepening of the US Treasury yield curve inversion (3m10s).
A corresponding rise in FOMC fee reduce bets has since occurred, which stands to weigh negatively on USD…