The departure of German GDP to negative territory, weak statistics on China, as well as the growth of the global debt market to a new record high of $16 trillion, raised investor concerns for the fate of the global economy and sent the US stock market to a peak. As a result of Wednesday, US stock indices lost an average of 3%.

The publication on German GDP for the second quarter, released on the eve, confirmed analysts' forecasts, however, the very fact of a decrease in the indicator by 0.1% in quarterly terms made a strong impression on investors. The figures indicate that the German economy is turning from the "locomotive" of the eurozone into the weakest link and needs not only monetary, but also fiscal incentives. However, while the increase in government spending and tax cuts in Germany are still in doubt, the ECB may launch another program of quantitative easing next month. This puts serious pressure on the bulls on EUR/USD.

Meanwhile, the US economy is still in good shape. The fact that it does not have such phenomena as the bursting of the dot-com bubble, the mortgage crisis and financial instability, supports the greenback.

The only concern is the inverse of the yield curve of US government bonds.

For the first time since the global financial crisis of 2008, the yield on ten-year bonds was lower than the yield on two-year bonds. This phenomenon is usually perceived as a harbinger of recession in the US economy. It is important to understand that, although each recession was preceded by an inversion, not every inversion signals a recession. False positives sometimes occur. According to a Credit Suisse study, even in the worst case scenario, 22 months can elapse before a recession.

Now, it would be easy to ignore the signal of the yield curve if the world economy grew, and bright time awaited us, but this is not so. Any of such negative factors as the escalation of the US-China trade war, Brexit, Hong Kong protests and political problems in Italy could lead to a recession. According to experts, regardless of the duration of the inversion of the yield curve, the risk of a recession in the US economy in the current cycle is higher than ever.

The emergence of the inversion of the curve also indicates an increase in expectations of a rapid reduction in rates by the Fed.

"The Federal Reserve can make a difference, and the market clearly says that the regulator should lower the interest rate three times, and then the yield curve will look right. I think this is what the central bank must do so that the US economy continues to develop, it will support foreign markets. At the same time, I don't see anything good in that even after the tax reform and against the backdrop of a growing economy, we are in a cycle of lowering rates - this is all the result of the White House's foreign policy," said Ross Gerber, co-founder of investment company Gerber Kawasaki.

At first glance, the postponement of the entry into force of "Chinese" tariffs and the acceleration of US inflation should outweigh the concerns about the global recession. However, the Fed has lately been paying more attention to international risks, and not to trade wars and internal statistics. If the US central bank continues to operate in the same vein, the potential for lowering the EUR/USD pair will be limited to 1.1-1.11.