In the USA, interest rates continue to decline and so, too, are spreads. Our benchmark 10-year/2-year yield curve ratio dropped in the last two weeks from 0.30x to 0.17x, but that is still far above 0.00x that denotes inversion. We monitor two other yield curve ratio metrics, one being an equal-weighted average of three yield curve ratios, and the other being an equal-weighted average of twelve yield curve ratios. They are at 0.03x and 0.02x respectively, so closing in on that inversion mark.
In Canada, the story is different. For the past four days, all three of our yield curve ratio metrics are inverted. We shall officially declare Canada to be on an Economic Recession Count-Down if all three metrics stay inverted for a further six sessions.
You can access this week’s Recession Barometer report here: … RB_070519
