Weak economic data out of China, Japan, and other regions of the world has investors clamoring for the safety of treasuries this morning, pushing the yield curve (10-year vs 3 -month) back to inverted levels. At other areas of the curve, the two-year yield dropped to its lowest level since February 2018.
US economic data has come in mixed so far with the Philly Fed Manufacturing report exceeding expectations and coming in at its highest level since November, but Retail Sales missed expectations falling 0.2% compared to expectations for growth of 0.2%.
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While Retail Sales in the US were a downer, the same indicator in China was even a bigger disappointment. On a YTD basis, retail sales through the month of April grew 8%. That may sound pretty positive at the surface, but it’s actually the slowest pace of growth since June 2003!
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