Similar signals were flashed in January and October 2018, just before furious market corrections took place, according to Inter-Pacific Securities head of research Pong Teng Siew(pic). Some prefer to stay cool and watch first.
Following the last inversion of the US Treasury yield curve, long term Treasury yields have again dipped below those of a shorter duration, triggering alarm bells.
Growth concerns have re-surfaced while historically, yield curve inversions had accurately predicted recessions.This time, investors flocked to 10-year bonds, driving down yields, as coronavirus fears and data indicating a slowdown of the US economy, re-ignited concerns over the risk of recession.
The yield curve soon uninverted after flashing red last Tuesday, but its roller coaster movements indicate unstable market conditions.
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