February 8, 5:00 pm EST
Let’s take a look at some key charts as we end the week.
As we discussed yesterday, we had growth downgrades from Europe this week, and it was driven by the worst case scenarios of a no-deal on Brexit, and/or a continued stalemate/no deal on U.S. China trade.
Let’s see how that’s being interpreted in the key global interest rate markets.
First, we should acknowledge that the big swing in global economic sentiment was driven by the optimism surrounding the 2016 elections (i.e. a pro-growth U.S. President).
That gave us a sharp rise in global interest rates, and a sharp rise in global stock markets. But now some of the air has been taken out of the optimism-balloon, and some big levels are being tested.
First, here’s a look at the U.S. 10-year yield. On election night the 10-year was trading around 1.75%. It has traded as high as 3.25% since. But now we have this big line representing the rise from election night …