Kai Lee

10Y−2Y inversion historically precedes recession by 6–24 months.

Tightening = green · Widening = red · Source: ICE BofA via FRED

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  OCT
  CPI m/m

  Global · Macro
  0d
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  OCT
  CPI y/y

  Global · Macro
  0d
• 28

  OCT
  Trimmed Mean CPI m/m

  Global · Macro
  0d
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  OCT
  Official Cash Rate

  Global · Central Bank
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• 28

  OCT
  RBNZ Rate Statement

  Global · Macro
  0d
• 28

  OCT
  RBNZ Press Conference

  Global · Macro
  0d
• 28

  OCT
  Annual Budget Release

  UK · Macro
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• 28

  OCT
  BOC Monetary Policy Report

  Global · Central Bank
  0d
• 28

  OCT
  BOC Rate Statement

  Global · Macro
  0d
• 28

  OCT
  Overnight Rate

  Global · Macro
  0d

• Yield Curve

  The 10Y–2Y spread has turned marginally positive at +32 bps, consistent with early-stage curve normalization following a period of inversion. Long-end term premium is visible, with the 30Y–10Y spread at +31 bps.

• Rate Levels

  The 10-year Treasury yield at 5.00% reflects a restrictive rate environment, with real yields remaining meaningfully positive across the curve.

• Policy Expectations

  The 2-year yield at 4.68% sits above the 3-month rate at 4.22%, with the forward curve implying limited near-term easing.

• Volatility

  Equity implied volatility is at moderate levels, with the VIX at 17.7, consistent with normal market functioning and limited acute uncertainty.

• FX Markets

  EUR/USD at 1.1188 is within the range that has characterized a broadly balanced dollar environment in the current cycle. USD/JPY at 157.4 reflects significant yen weakness, a function of the Bank of Japan's historically accommodative policy stance relative to G10 peers.

• Equity Markets

  U.S. equities are largely unchanged on the session, with the S&P 500 showing limited directional conviction. Small-caps are outperforming large-caps, with the Russell 2000 at +2.13% versus the S&P 500 at -0.18%.

• Credit Conditions

  Investment-grade spreads at 91 bps are within the range consistent with stable credit conditions and moderate risk appetite. High-yield spreads at 338 bps suggest moderate compensation for default risk in below-investment-grade credit.

• Inflation Expectations

  10-year breakeven inflation at 2.34% remains modestly above the Fed's 2% target, consistent with a sticky inflation narrative in long-run market pricing. The 10-year TIPS real yield at 2.66% reflects materially restrictive real interest rate conditions.