(Bloomberg) -- Even before investors faced the prospect of a trade war's impact on economies, a number of indicators suggested that the market narrative based on synchronized global growth had some clouds gathering on the horizon.
A still-flattening yield curve, falling economic-surprise gauges and a topping out in purchasing-manager indexes indicate at least some caution should be taken before extrapolating further strength in the global economy.
After a slight reversal in February, the U.S. yield curve has resumed its downward trend, a pattern typically associated with slowing economic growth and even a recession if it inverts.
The most recent readings of PMIs in Europe, China and Japan all showed declines. While still above the 50 level that indicates expansion, the slowing momentum could be a sign the pace of growth has peaked.
Citigroup Economic Surprise indexes are also showing a declining trend, across the U.S., China, the euro-zone and Japan. The gauge falls when economic data is worse than expected.
To contact the reporter on this story: Cormac Mullen in Tokyo at cmullen9@bloomberg.net.
To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Adam Haigh
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