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Allow me to go back to 1981 when I'd just left University and had my 1st job interview as a Trainee Bond Trader.
My Interviewer was aged 35 but looked 45, gave me 3 life lessons. One was " You don't want this job as you will be burnt out at 35. The wild Social life will see you divorced."
He then said there is only one thing you need to fully understand and follow to make money and that is the Yield Curve.
It gets very little attention as it's normally upward sloping , that is starting from LIBOR (O/N Cash rate ,bank to bank lending) and the 2 and 5 year bond yields against the 10 and 30 year, it's a $14 trillion market.
The curve is now at it's flattest in 10 years (2yr/10yr) and is saying the Fed is in danger of over tightening and causing a recession. Indeed , the last time we were here was 10 years ago and at the start of a 18 month world recession and the GFC.
Conversely when we have a steep yield curve then it always accurately foretells that the world's economies are in a great space.
Now, many Fund Managers are liquidating portfolio's on this concern as it could/should create capitulation.
Plus currencies, commodities will get hit. The Eur/US was at 1.5600 and the OZ at 97 falling to 60 cents.
It's hardly discussed here or on OZ business channels but it is overseas. It is key as the Fed is in danger of strangling world economies to death with excessive tightening.
BTW. I never did get that job as he thought I wasn't "tough enough" but he was 100% right on everything else.
