Turbulence in International Financial Markets

Summary

The last few weeks have seen tensions increase in global financial markets. Most countries have seen high levels of volatility in their securities markets, and bond yields in highly developed countries have fallen.

Key points

• Key points:
• The markets are watching the correlation between 2- and 10-year bonds and, on several occasions since August 14, the yields of the former have been higher than those of the latter, which is uncommon
• Even if conditions would not led to a recession, the fact that the markets think that there may be one results in the widespread pessimism that can cause one

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