2s-10s flattest since the crisis
Reuters reporter Jamie McGeever takes a closer look at bond market today. It's a good report that explains some of the ins-and-outs for FX traders who are less familiar with bonds.
An inverted U.S. yield curve has preceded all five U.S. recessions since 1980 but at the moment, it's virtually impossible to create an inversion because short term rates are at zero. Signals are also skewed because of QE.
This chart shows the yield on the 10-year note compared to the yield on the 2-year note. You can see it was inverted just before the crisis but this week it also broke below support. That argues the Fed is on the wrong track.
