Mike “Mish” Shedlock's
Sitka Pacific Capital Management,Llc
Those looking 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
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.
Australia 10-Year Bond Yield
Yield on Australia’s 10-year bond is approaching the spike low of 2.236% in March.
Unlucky 25
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 in recession. All that waits is the official pronouncement.
On January 31, 2015 I proclaimed Canada in Recession, US Will Follow in 2015. That assessment on Canada was accurate.
Time will tell if the US went into recession in 2015. I believe the US did go into recession in December.
This material is based upon information that Sitka Pacific Capital Management considers reliable and endeavors to keep current, Sitka Pacific Capital Management does not assure that this material is accurate, current or complete, and it should not be relied upon as such.
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