In the film Groundhog Day, Bill Murray plays TV weatherman Phil Connors who, against his wishes, is sent to report on the annual Groundhog Day event in Punxsutawney, Pennsylvania and, while there, relives Groundhog Day again, and again and again with an eye toward his having the perspective and the time to become a better person, which he eventually does.

After a brief relief bounce on hopes that the U.S. might be trying to ease tensions with China, the equity market downturn resumed last week as investors left stocks for the perceived safety of government bonds. Recession-related concerns grew as the Treasury yield curve inverted, more global government bond markets traded in negative territory and poor economic data came out of Germany and China.

The “risk-off” mood in global markets deepened last week – as global government bond yields plunged to historical lows and the inversion of part of the U.S. Treasury curve sparked recession fears. Perceived safe-haven assets such as gold rallied. We still see limited near-term recession risks as central banks’ dovish pivot helps stretch the economic cycle, yet caution that trade and geopolitical tensions pose downside risks.

U.S. Treasury yields closed sharply lower again last week, led by long maturities. By mid-week, the 2-year/10-year Treasury yield relationship inverted for the first time since 2007 and the 30-year yield closed below 2% for the first time ever.