Yield curve inverts in recession warning

“The four most dangerous words in investing are: ‘this time it’s different.’” – Sir John Templeton

 

 

HEADLINES

 

 

• 2-year Treasury yield tops 10-year rate, a ‘yield curve’ inversion that could signal a recession
• Dollar edges higher on safe-haven bid, euro drops
• Oil prices slide as Biden announces largest-ever Strategic Petroleum Reserve release
• Gold set for best quarter in nearly 2 yrs on Ukraine war, inflation woes
• Dow drops 500 points to end worst quarter for stocks in 2 years
• USD/JPY: Three ways by which the yen may be able to halt its slide – Citibank
• SILVER Short Term: Downside favored

 

 

FOREX

 

 

2-year Treasury yield tops 10-year rate, a ‘yield curve’ inversion that could signal a recession

 

The 2-year and 10-year Treasury yields inverted for the first time since 2019 on Thursday, sending a possible warning signal that a recession could be on the horizon.

The bond market phenomenon means the rate of the 2-year note is now higher than the 10-year note yield.

This part of the yield curve is the most closely watched and typically given the most credence by investors that the economy could be heading for a downturn when it inverts.

 

Dollar edges higher on safe-haven bid, euro drops

 

The dollar edged higher on Thursday as a lack of progress in peace talks between Russia and Ukraine boosted demand for the safe-haven currency and as the energy shock that has resulted from the war weighed on Europe’s economy.

 

 

COMMODITIES

 

 

Oil prices slide as Biden announces largest-ever Strategic Petroleum Reserve release

 

Oil prices were lower on Thursday as the White House announced that it will release 1 million barrels per day of oil for the next six months from the Strategic Petroleum Reserve — in an effort to calm spiking oil and gas prices. Oil prices dropped sharply Wednesday evening after reports that such a move was likely. President Joe Biden is set to give remarks later on Thursday.

 

Gold set for best quarter in nearly 2 yrs on Ukraine war, inflation woes

 

Gold on Thursday was headed for its best quarter since the coronavirus pandemic-led surge in mid-2020 as concerns over soaring consumer prices and the Ukraine crisis bolstered bullion’s safe-haven appeal.

 

 

STOCKS

 

 

Dow drops 500 points to end worst quarter for stocks in 2 years

 

Stocks fell for the second straight session on Thursday as traders wrapped up a rocky first quarter for Wall Street.

Thursday marked the last trading day of March and of the first quarter, which may have contributed to the late-day weakness as professional money managers tweaked their portfolios for the end of the period.

 

 

ANALYSIS

 

 

USD/JPY: Three ways by which the yen may be able to halt its slide – Citibank

 

“UST yields enter a period of consolidation – there may be some hint of this in the brief UST 2-10Yr curve inversion seen in Monday’s session and as the UST curve as a whole rapidly approaches a flattening bias which may be a signal that US yields are close to topping out.”

“Political pressure on the BoJ from the Kishida government ahead of Japan’s upper house elections in July – unlikely for now given recent comments from the PM and his cabinet colleagues.”

“Criticism from the US Treasury as JPY REER trades at historical lows – unlikely for now given the current heightened geopolitical tensions require Japan’s political support for the US against Russia.”

 

 

CHART

 

 

SILVER Short Term: Downside favored

 

Technical View: Short position below 25.2. Target 23.8. Conversely, break above 25.2, to open 25.6.

Comments: The pair is expected to resume descent after correction.

Source: Trading Central
 

 

CALENDAR

 

 

*Times in GMT

 

 

Source: FX Street Economic Calendar

SOURCES

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/usd-jpy-three-ways-by-which-the-yen-may-be-able-to-halt-its-slide-citibank-202203310929
https://www.cnbc.com/2022/03/30/stock-market-futures-open-to-close-news.html
https://www.cnbc.com/2022/03/31/oil-markets-us-strategic-petroleum-reserve.html
https://www.cnbc.com/2022/03/31/gold-markets-russia-ukraine-war.html
https://www.cnbc.com/2022/03/31/2-year-treasury-yield-tops-10-year-rate-a-yield-curve-inversion-that-could-signal-a-recession.html
https://www.cnbc.com/2022/03/31/forex-markets-russia-ukraine-war-japanese-yen-euro.html