As the "January Rally” continues to take hold in the global markets, markets seem to have gotten back on stable footing.
Though we do believe that the current market rally has some legs to stand on, we do have our eye on the the 2 Year/10 Year US Treasury yield curve, and urge investors not to forget about this important market indicator. As of this post, the spread on the 2 Year/ 10 Year spread is a dangerous 0.19 basis points away from inversion.
As shown in our chart below, the 2 Year/ 10 Year spread has not been this low since before the onset of the 2009/2009 global Financial Crisis. The threat of yield curve inversion, coupled with slowing economic indicators around the world is something investors should be mindful of and prepare for.