In August, the yields on two-year Treasury notes were 5.3 basis points higher than those on the 10-year government bond, which indicated the largest gap since March 2007. This kind of inversion of the yield curve, in which shorter-term rates are higher than longer-term ones, has been a turnaround signal of whole macro environment. The trade war between US and China escalated further, as a result the offshore yuan has swung lower after the onshore rate fell to a fresh 11-year low against the dollar. The US and EU equities market shows more vulnerable due to trade war and no-deal Brexit situation. Mainland Chinese equities are outperforming slightly in the wake of figures showing a recovery in industrial profits. But the Hang Seng cannot find traction amid the escalating violence in Hong Kong.
Gold keeps pushing higher as a safe haven to the level of $1550/oz, despite Powell suggested that the first interest rate cut in the US was more tweaking than a change of policy. The market predicts there will be another 2 times rate cuts in 2019. The Q2 performance of precious metals company were in line with consensus expectations, but the share prices are still waiting for another round of re-rating.