Who is listening to the bond market?

<p>Kia ora,</p><p>Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news that the US Treasury 2-10 bond yield has inverted (just - and has now gone positive again), and that usually is an early warning that the US faces recession - in bond investors' minds anyway. But equity investors are shrugging the risk off, with gains on most markets around the world.</p><p>The widely watched <a href="https://www.conference-board.org/topics/consumer-confidence" target="_blank"><strong>Conference Board survey</strong></a> of American consumer sentiment reported mixed signals, although perhaps supporting the bond signal. The 'Present Situation' view brightened in March, but the look-forward 'Expectations' view went the other way.</p><p>The uptick in the 'Present Situation' is bolstered by a firming of retail sales in the <a href="http://www.redbookresearch.com/8702.html" target="_blank"><strong>report</strong></a> for last week.</p><p>And in a further sign they are feeling confident at the moment, Americans continued to <a href="https://www.bls.gov/news.release/jolts.nr0.htm" target="_blank"><strong>switch jobs</strong></a> at near-record rates in February, with 4.4 mln workers leaving their positions in a historically tight labour market. Employers hired 6.7 mln people that month while reporting 11.3 mln job openings.</p><p>And the Dallas Fed <a href="https://www.dallasfed.org/research/surveys/tssos/2022/2203.aspx" target="_blank"><strong>services survey</strong></a> was also relatively upbeat, even if it did suggest that retail sales there may have peaked.</p><p>There was another <a href="https://www.treasurydirect.gov/instit/annceresult/press/preanre/2022/R_20220329_1.pdf" target="_blank"><strong>US Treasury bond auction</strong></a> this morning, for their 7yr Note, and this one brought a sharp rise in yield to 2.43%, up from 1.84% at the <a href="ht