Are we due a recession? US Four-quarter GDP (%) Recessions 10 8 - - PowerPoint PPT Presentation

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Feb 25, 2024 160 likes •218 views

Are we due a recession? US Four-quarter GDP (%) Recessions 10 8 6 US Four-quarter GDP (%) 4 2 0 -2 -4 -6 Q2 1954 Q2 1962 Q2 1970 Q2 1978 Q2 1986 Q2 1994 Q2 2002 Q2 2010 Q2 2018 Source: Datastream, October 2018 B O N D V

SLIDE 1

B O N D V I G I L A N T E S

Source: Datastream, October 2018

US Four-quarter GDP (%)

2 4 6 8 10 Q2 1954 Q2 1962 Q2 1970 Q2 1978 Q2 1986 Q2 1994 Q2 2002 Q2 2010 Q2 2018

Recessions

Are we ‘due’ a recession?

US Four-quarter GDP (%)

SLIDE 2

The flattening yield curve

Source: Datastream, October 2018

US 10-Year Treasury Yield – US 2-Year Treasury Yield (%)

US 10Y Treasury Yield – US 2Y Yield (%) Recessions

1 2 3 Dec-88 Dec-93 Dec-98 Dec-03 Dec-08 Dec-13 Dec-18

SLIDE 3

Emerging market currencies: Depressed valuations

Source: Bank of International Settlements, August 2018. *Equal weighted: Brazil, Indonesia, Mexico, Russia, South Africa, Turkey

EM currency basket*: Average real effective exchange rate

Real effective exchange rate

Asian Crisis Financial Crisis Commodity Crisis Trade Crisis?

70 75 80 85 90 95 100 105 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18

SLIDE 4

B O N D V I G I L A N T E S

Source: Bloomberg as of 5 Oct. 2018.

The week ahead Monday: Japan Current Account Wednesday: UK Trade Balance, UK GDP; US PPI Thursday: Bank of England Credit Conditions & Bank Liabilities Surveys Thursday: US CPI Friday: Eurozone Industrial Production, US University of Michigan Current Conditions survey