Aussie yield curve tracks US towards recession signal

Monday, 17 December 2018

New flats for the belly of the Aussie yield curve today as the 2/5 tracks towards inversion, only 8bps to the good now:

The US has already inverted of course and we appear set to follow:

Inverted yield curves are a reliable indicator of recession but they tend to be early in the forecast. On most occasions, growth has continued for two to three years after the inversion so it’s not a cause for panic.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.