Daily Archives: Apr 17, 2018 at 07:16 am EST

Treasury Yield Curve Flattens As Retail Spending Rebounds

The difference between the 10-year and 2-year Treasury rates narrowed to 47 44 basis points on Monday (April 16) – the smallest gap since late-2007. The last time this widely followed spread was this close to zero the US economy was close to a recession. Is this indicator flashing a similar warning today? No, according to a broad reading of the economic data, which reflects a healthy trend. The question is whether the narrowing yield spread is still a reliable late-cycle warning that the macro profile will weaken in the months ahead?
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Macro Briefing: 17 April 2018

Trump blocks Russia sanctions announced by his UN ambassador: Politico
Japan’s Abe and Trump will discuss N. Korea on Tuesday: Reuters
US retail sales rose sharply in March after 3 monthly declines: MarketWatch
NY Fed Mfg Index growth eases in April; 6-mo outlook plunges: NY Fed
China’s holdings of US Treasuries increased in February: Reuters
China’s economy grew 6.8% y-o-y in Q1, matching Q4’s pace: RTT
China says it will end foreign ownership caps on car firms by 2022: Reuters
US business inventories rose 0.6% in Feb, in line with expectations: RTT
US home builder sentiment strong but edges down in April: HousingWire
Japanese gov’t maintains moderate growth outlook for economy: MNI
Treasury 10yr/2yr yield curve continues to flatten, easing to 44 basis points: