In March, manufacturers of world’s top five economic superpowers had languished lavishly, and the flaming trade tensions, which had been keeping all major economies at their toes for most of 2018, may have phased out for now, but the burn marks have still been burning, as surveys showed a deteriorating outlook on factory output amid a gruesome trade war.

Meanwhile, amid further trade conflicts between the US and EU Commission over additional tariffs on Europe-made cars had been adding further penetrations on the hope of a possible rebound of global growth. According to survey data released on Friday (March 22nd), the factory activity in 19-country eurozone had shrunk at its fastest pace in nearly six years, while the third largest economy of the world, Japan had posted a record manufacturing output drop for the first time in three years, which was largely led by its heavier exposure to rapidly slowing Chinese economy.

German 10-yr bond yields, which had experienced a plunge following Wednesday’s (March 20th) Fed rate decision, which signaled no more rate hikes in 2019, had again dived on Friday to dwindle below zero. Concomitantly, in New York, the US 10-yr Treasury note yield had been plunged to a fourteen-month low, as growth worries had been weighing on inflation forecasts.

Citing such inversion on treasury yields curve as a traditional indicator of recession, a chief economist at Allianz in Newport Beach, California, Mohammed El-Erian said, “While such an inversion has traditionally been an indicator of a recession, this time around it may be less about the prospects for the U.S.

economy and more about spillovers from what is happening in Europe and the bond market there, together with the effects of the Fed’s surprising decision to be very dovish again with its unconventional policy tools”.