Are Global markets showing signs of recession?

Team Veye | 01-Apr-2019 Global markets

With Credit markets showing signs of distress about slowing growth with yields on US Treasuries slipping once again, the Global recession fears are looming large. The yields on 10-year US Treasuries have fallen to 2.34%, a 15-month low, according to Reuters. Treasuries were at 2.37% last week.

Although the developments in US-China trade war talks appeared to steady stock markets with China likely to make concessions on forced technology transfers in an attempt to get a deal over the line, this speculation around recession may de-stabilize the markets again. Negotiators are in Beijing as part of ongoing discussions about trade with hopes of a deal to prevent $250 billion of US tariffs on China and boost cooperation between the two sides continuing to be a thorny issue.

The yields in Australia and Japan are also at multi-year lows and have sparked concerns that recession could be just around the corner. Japan’s 10-year yields fell to the lowest since 2016 and Australian 10-year bond yields at record lows. Just a few months after rising bond yields frightened the markets, they’re now slipping to the lowest levels in years to underscore concerns about slowing global growth. The yields in Australia and New Zealand dropped to record lows, after a closely-watched part of the U.S. curve inverted on Friday as investors wager that a recession is coming.

Investors gave up on shares last week and fled to the safety of bonds while the Japanese yen hovered near a six-week high as risk assets fell out of favour on growing fears about a US recession, sending global yields plunging. US stocks futures fell, with E-minis for the S&P 500 skidding 0.5%. National Australia Bank's yield curve recession modelling is pointing to a 30-35% probability of a US recession occurring over the next 10-18 months. 

Our analysts reckon that going by the stock market history, there has been a crash every 10-years and the last one took place in 2008. Although we have already experienced instability in the markets late last year but we cannot afford to be carefree thinking that the storm has passed. We advise our investors to be cautious and at the same time will keep them abreast of any such developments at the right time.  


Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website, and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.

veye logo

Grab Your Free Report On 5 ASX Dividend Stocks To Buy In 2024