The 10/2 yield curve continues its grinding but sneaky bend upward. The media lathered up a dumbfounded public about the horrors of the inversion last August, but it always has been a subsequent steepening of the curve that would bring the changes, possibly nasty ones.
On this reflationary global market bounce and threatened USD breakdown the steepening is inflationary at this time. But if the reflation fails the curve is likely to continue and/or accelerate steepening, in that case under deflationary pressure.
More than at any time in recent memory getting this stuff right (inflation/deflation, steepening/flattening, reflation/failure, Silver/Gold, USD, CDNX/TSX) is super important because you can’t just invest the way you want to invest. You should to do it by what the indicators say; like our friendly yield curve here for example, in conjunction with a whole raft of other indicators. You need a narrative to carry as long as it is aligned with reality and you need to be willing to alter it as the indicators instruct.
Graphic/data: CNBC
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