Market News & Analysis
FTSE rallies after fails to steer a clear course on Brexit
March 28, 2019 10:21 AM
China trade progress may slow Wall Street decline
Other European indexes are also making progress this morning despite a lower close across US indices as Wall Street grapples with the domestic US economic slowdown. The US-China trade talks seem to have made some palpable progress on contentious issues of technology transfer and the limitations on US companies operating in China; this is raising hopes that the eventual resolution of the dispute will go some way to alleviate the drag effect of slowing global growth.
US bond yields on an upward trajectory
The Fed’s recent rate hike turnaround is continuing to create demand for US bonds and suppress yields on government debt, pushing the yields on 10-year US government paper below the level of 3-month yields. This kind of inversion in the yield curve tends to be the harbinger of recession, signalling the start of an economic decline within the next one to two years. The last time yields were inverted in such a way was in 2007 before the start of the 2008 financial crisis.
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