### POV, CURVE INVERSION/RECESSION...>

US TSY FUTURES: ### POV, CURVE INVERSION/RECESSION FLAG AND HY CREDIT SPDS

- Bang curve inversion drum loud and long enough, everyone starts talking about

it: multiple strategy and opinion write-ups over wkend re: continued Tsy yld

curve flattening (10yr) lows well as Eurodollar strip inversion/extension (see

MNI ANALYSIS: Futures Market Points To Fed Rate Cuts In 2020). Note: L/T trend

of Tsy yld curve flattening points to inversion (inversions over past 60yrs,

recession occurs appr 66% of time within two years).

- Market participants at a loss to explain today's sell-off in rates (albeit on

light volume, TYU<450k), yield curves bouncing off lows.

- While MNI has covered same extensively over the past year, Reuters posted good

write-up on recession trigger correlation to corporate credit spds as a "pretty

big tell". However, morning sell-off in rates coincided w/Bank of America

research piece heralding "strong earnings growth and low defaults" are "around

the corner", that yld curve "is often over-interpreted" while "lag to tightening

in financial conditions could be considerable." Note, large Eurodlr steepener

Block soon after (+40k EDU0/U1, 0.020, 0.030 last), betting on further rebound.