China yield curve inverts, focus on US retail sales – Tip TV

May 12, 2017, 11:59 AM

The yield on Chinese five-year government bonds hit its highest since 2014 on Friday, causing a rarely seen inversion of the yield curve. What is the reason for the yield curve inversion and will it have an adverse impact on the financial markets?

Marc Ostwald, Strategist at ADMISI says the yield curve inversion is due to hedging activity and regulatory crackdown on leveraged investment.

Ostwald adds all eyes are on the US retail sales release. “We need this number to print in line with estimates as that would add credence to the Fed’s view that the slowdown in the first quarter was ‘transitory’.

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