Friday, 12 February 2016

Signs of trouble in Canada, Australia (and by extension, New Zealand)

I haven't checked yet but I don't expect much conformation in NZ's zombie media. According to John Key, who will pretend to be "comfortable", NZ will be the sole exception in the world and be untouched by global economic meltdown. Lol.

PS. I just checked the RNZ website. Nothing. Are they waiting for a directive from above?

Canadian and Australian Yield Curves Invert – Clear Recession Signals

Thoselooking for clear recession signals in Canada and Australia have them. Portions of the Canadian and Australian yield curves are now inverted. Canada has been in a state of inversion for at least four weeks.
Canadian Yield Curve
Canada Yield Curve
In Canada, the entire t-Bill portion of the curve from 1-month to 1-year is inverted with 2-year bonds.
Reader Gary pinged me with the above chart from the Financial Post.
Australia Inversion
I did a quick check on Australia. Here are the numbers from Investing.Com.
  • 1-Year: 1.913%
  • 2-Year: 1.782%
  • 3-Year: 1.749%
  • 5-Year: 1.971%
  • 10-Year: 2.395%
As you can see, 1-year debt trades at a higher yield than 2- and 3-year debt. 1-year debt is very close to inversion with 5-year debt.
In December, Fortune Magazine reported Australia Is Going on 25 Years Without a Recession.
Australia has not had a recession since June of 1991. That track record will soon be over.
Australia is recession. All that waits is the official pronouncement.
Mike “Mish” Shedlock

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