Richard Franulovich, the head of FX strategy at Westpac, suggests that a few key markets have been trending in a more constructive direction lately, signaling less concern about growth risks with the U.S. bond curve has been steepening, Eurozone financials have been outperforming and the USD has eased.

• “Markets had been signaling that global growth is faltering and policy is too tight for a while, so the trend shift recently is notable. The signal is far from uniform across markets however; breakeven yields suggest disinflation risks is still high, while copper and the ADXY have at best merely stabilized in recent weeks.
• A simple US recession probability model confirms that it’s far too soon to sound the all clear.”