The stock market of Europe fears the prospects of a recession
Worrying European investors on the time has dispelled the news about the delay – now until December 15 – the introduction of new American tariffs on Chinese goods. However, this positive news did not last long and joyous reaction of the markets was short-lived.
Now concern market participants began speculating about a possible recession in the US economy after the U.S. market was followed by an inversion of the yield curve – the yield on 10-year U.S. government bonds for the first time since 2007 was below the yield of two-year debt securities. This phenomenon is a sign of a looming recession.
Recently, the market participants and so worried about prospects for the global economy, and the U.S. in particular, expecting that global GDP growth will have a negative impact the consequences of the trade conflict between the US and China. At the moment, in their opinion, the risk of a recession in the U.S. economy increased due to the aggressive trade policy of Washington toward China, causing damage to the rest of the world.
Within the European region investors are watching the statistics on the Eurozone economy, which is not pleased participants of the market. In addition, the European Central Bank (ECB) advised British banks to hasten the transfer of operations to the jurisdiction of the European Union to avoid financial losses in case of realization of “hard” scenario Brexit. Investors believe that the current British Prime Minister Boris Johnson is implementing Brexit at the end of October “in any scenario”.