The ongoing discussions about the yield curve inversion reached euphoric levels as the 10-year and 2-year Treasury yield fell to its lowest since before the financial crisis, with one thing in mind, long lasting inversions are a key signal for recessions. Keep in mind that the start of the inversion and the start of the subsequent recession could be separated by 12 to 18 months of somewhat normal markets.
This inversion discussion continues but it is now joined by the fact that British Prime Minister Boris Johnson is planning to suspend parliament, Johnson got the approval of the Queen, with the suspension impacting sterling as it takes the Brexit conversation down a new path. Sterling fell around 0.4% against the dollar on Wednesday after this announcement. This highly-controversial move will restrict parliamentary time before the Brexit deadline and will likely end in the UK leaving the EU with no deal. Keep in mind that the US and the UK are said to be discussing a trade deal, details to be announced soon.
On the continent, Germany is showing signs of stable consumer sentiment despite the expectations of Germany falling into recession. In Italy, the Five Star Movement (M5S) and the Democratic Party (PD) made progress on Tuesday toward a coalition deal.