The US Treasury 10-year bond notes have officially fallen to a lower yield rate than the 3-month bond notes – the first inversion between these particular bonds since 2007.

The fiscal anomaly is usually an early indicator of recession, and last Friday also saw the 3-year bond notes invert against 1-year bonds, with the latter yielding 2.46% compared to only 2.26% for the 3-year bonds.

Gold began the week up $8.22 per ounce, peaking at $1,323 today, before falling back to $1,321.60 per ounce. The gold price has climbed $12.73 per ounce in the last week, showing how sharp a jolt today’s gains are.

The precious metal has made gains for three weeks running, but other safe havens such as the Yen are on the up also, with Japan’s currency at a six-week high.

Former Federal Reserve chair Janet Yellen spoke in Hong Kong last week arguing that she doesn’t fear a US recession, but admitted that the Fed may have to undo its most recent interest rate rise from December.

Precious metal specialists Heraeus in their latest market update showed confidence that gold would become more attractive in the coming weeks and months as the US Dollar’s weakness, fuelled by no further interest rate rises, would make the US Treasuries less competitive with foreign bonds.

The benefit of safe haven investments could be appreciated soon, with global stock markets already beginning to show signs of concern. The Nikkei was down 3% today, while the FTSE 250 lost 1.11%. All other major European markets were down in trading today, while the Dow Jones is currently at a two-week low point – having recorded its second worst day of 2019 last Friday.

The economics of it all are quite simple: global growth is slowing. Last year the reported rate was between 4 and 4.4% globally. This year, according to the IMF, it will only be 2.9%. The US Federal Reserve has abandoned all plans to raise interest rates this year, and so too has the European Central Bank. The Bank of England have chosen not to raise rates so far this year but aren’t expected to commit to a longer-term plan while Brexit remains undecided.

Brexit is one factor affecting Europe, but the US/China trade war has had a much wider international impact. Disruptions to supply and demand have seen manufacturing in particular cool down over the past 12 months. The US recorded a 21-month low manufacturing output in February and is at 52.5 points on the IHS Markit scale. The 50 mark is stagnation and below is economic shrinkage, so America is only just keeping its head above water. Germany and France are also feeling the pinch, with the automotive demand decline particularly hitting Germany – now at three months of manufacturing decline in a row.

For the UK, the Office for Budget Responsibility has suggested growth of 1.2% this year (down from 1.6%), but the Organisation for Economic Co-operation and Development (OECD) puts Britain at 0.7% - down from 1.4% and a much sharper decline. The Brexit situation is clouding economic forecasting in the UK, with political whim affecting the strength of Sterling. A weak Pound helps the FTSE 100 and export costs, but a strong Pound helps reassure investors that the UK is a stable country to invest in. Without that investment the economy will slow down, and that risks devaluation of currency, rising inflation, and potentially recession.