While global trade war risks have dominated the agenda of late (and rightly so), another red flag is the ongoing flattening of the US yield curve – with the 2s10s spread hovering at a mere +27bp. For FX investors, watching the shape of the US yield curve goes beyond just gauging recession risks – it can also help to provide a bit of context around the current trading environment. And right now, the flattening of the US yield curve is telling of the two conflicting world’s that investors are having to contend with: (1) current economic optimism that is fuelling central bank policy normalisation and higher short-term ... (full story)