Chart of the Day – August 31, 2020

The spread on the 2/10 Treasury curve has been widening, and isn’t far from it’s downtrend resistance around 0.65%.  Below is its 2-yr weekly chart.

Roughly 12 months ago, the 2/10 briefly inverted (late-August of 2019), before starting to steepen.  Implications for steepening after inverting are known – but is data picking up enough to offset what is normally associated with a real recession and are we gearing up for a strong Q4/2021?  The market seems to be thinking this may the case!

CW