Leading indicators showing red flags

We look at a large number of leading indicators across several key economies. In particular, we focus on indicators relevant for the 3 key economic regions of the global economy (i.e. US, China & Europe). We then turn those indicators into traffic lights, color coding each one red-amber-green dependent on its message. Increasingly those indicators have been turning amber and red in the past 12 – 18 months. Amongst those indicators, market-related ones are typically the earliest to raise red flags – highlight growing risks. One of the key catch all indicators is the steepness of the Yield curve (measured as 10 less 2 year US yields). In the US, this curve has continued to flatten dramatically in recent months (& is now at its flattest since the GFC) – this highlights the rising risk of slowing global growth.