Message from the bond market

Financial markets have an busy week ahead with central banks in the US, Europe, China, Japan setting monetary rates. Bond markets are at the current stage pricing in a recession for the biggest developed economies. Yield curves, here measured by the difference between long term and short term bond yields, are indeed solidly negative. If history is any guide, this has always been an indication of an upcoming recession. The message by the bond market to central bankers is that they better release the monetary brakes somewhat to avoid further economic pain.