Volatility remains high at the moment as one of the most tried and tested indicators has signalled a US recession may be looming.

The US Yield Curve, the difference in yields in the short and long-dated bonds, has started to invert. That means there is more demand for far-dated bonds, suggesting investors are looking to put their money into safe-haven assets for the long-term, to ride out what might be ahead.

An inverted yield curve is one of the most widely used indicators that suggest a recession is looming. So there is plenty to be nervous about at the moment

The move comes on the back of the US-China trade wars heating up last week and more worrying economic data from around the globe.

Today the focus will be on the US to see if markets can bounce back. The key data point for the day will likely be retail sales, while we will also get Philly Fed manufacturing. The SPX will be on watch after tumbling nearly -3% yesterday.

Out of Europe, the UK gets another top-tier data release, with retail sales. There was some relief for the GBP/USD yesterday as CPI ticked up to 2.1%, in what was one of the good news stories, in an otherwise dark day for world markets.

Forex Signal Update

The FX Leaders Team finished with 5 wins from 6 signals in what is shaping up as a massive week for the team. Be sure to check out the forex signals page to capitalise on the volatility that we’re seeing at the moment.

GBP/USD – Pending Signal

The GBP/USD might have seen a good CPI print, but the downtrend remains strong. The fact that it couldn’t bounce all that much is a bearish signal as we are hunting an opportunity to the short-side.

EUR/GBP – Active Signal

The EUR/GBP has been quite strong for the same sort of reason as the prior signal. The GBP remains very soft against the EUR and the trend is up. We are long here with good support below at 0.9200.

Cryptocurrency Update

BTC has fallen away for a second straight day and has now tagged the key $10,000 level.

I mentioned yesterday that I was getting set for a test of that level, but the move came far quicker than I thought.

The news that Barclay’s has dropped its relationship with Coinbase has clearly been another hit to the entire sector. Particularly on a day where there was widespread selling on financial markets, it was bad timing for BTC.