US yield curve inversion sees global stocks resume bear theme

Intermediate
  • An inversion of the US Treasury 2-10yr yield curve on Wednesday was the first such occurrence since 2007.
  • This sent negative shock waves through global financial markets, as an inversion of this segment of the yield curve is often a signal of a future resurrection in the US.
  • Furthermore, the US 30yr Bond moved to a record low yield too.
  • This sent US and global equity markets plunging lower and sets a far more negative tone for the pan-European benchmark stock average, the EURO STOXX 50.

EURO STOXX 50 plunge resets bear theme

A Wednesday plunge through 3294 and 3276 supports to reject the Tuesday surge higher and the short-term basing effort, to switch the bias back lower for Thursday.

We see an intermediate-term bear trend.

For Today:

  • We see a downside bias for 3270; break here aims for 3259 and 3246.
  • But above 3308 opens risk up to 3339.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 3246 and 3230.

  • Lower targets would be 3179, 3024/00 and 2929.
  • What Changes This? Above 3490 shifts the intermediate-term outlook back to neutral; above 3534 is needed for an intermediate-term bull theme.

4 Hour EURO STOXX 50 Future Chart

4 Hour EURO STOXX 50 Future Chart

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