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1.Market Observations, 8.Was Sticky

2 June 2017 (AFR) – Inverted curve suggests Chinese economy is on slippery slope – Could China be on the verge of a recession?

(2 June 2017, AFR, p14, by Christopher Balding)

China - 1-year bond yield‘For the first time ever, China is facing a dreaded prospect: the inverted bond yield curve. The phenomenon, in which long-term interest rates sink below short-term interest rates, has caused some consternation among market-watchers, who know it’s traditionally a harbinger of recession. The inversion suggests markets expect interest rates to fall eventually as monetary authorities move to stimulate economic activity.’

Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

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