One of the hot topics on the day has been the inversion of 5s10s in the Treasury yield curve. 5-year yields are now u
One of the hot topics on the day has been the inversion of 5s10s in the Treasury yield curve. 5-year yields are now up to 2.64% while 10-year yields are at 2.50%. Typically, that has been an indicator of a recession within two years but I find 2s10s to be the more appealing one to be honest.
And in that case, the spread has been reduced to just 10 bps on the day with 2-year yields up over 10.5 bps to 2.40%.
The charts continue to dictate that it is going to be tough to draw a line on where the bond market rout will stop and in the worst case scenario, if the bubble is actually going to pop.
But for now, recession indicators are presenting fresh risks to markets and that is something to be wary of in the short-term.
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