The harbinger of recession | 29 Oktober 2021

29 Oktober 2021, GBP/USD

The harbinger of recession

GBPUSD trading plan:

The yield on the U.S. 20-year bond raised slightly above the 30-year bond yield for the first time a move that garners attention because of investor sensitivity to inverted yield curves that can be a harbinger of recession. But broadly speaking, if there is a flight to quality or a rally, then in the back end, the 30-year is going to be much more liquid than the 20-year. On the other hand, it does broadly reflect the flatter yield curve to which the market has been pricing. This is due to expectations for swifter Fed action to choke off inflation. The market has priced a steeper rate hike path which has cause the entire yield curve to flatten, although not invert.

Investment idea: range 1.3725 -1.3815.

David Johnson
Analyst of «FreshForex» company
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