OPEN-SOURCE SCRIPT
Inverted Yield Curve (US01Y/US10Y Ratio)
This indicator calculates and visualizes the ratio between the US 1-Year Treasury Yield (US01Y) and the US 10-Year Treasury Yield (US10Y). It provides a clear visual representation of the relationship between short-term and long-term interest rates, which can be a valuable tool for analyzing market conditions, potential recessions, or shifts in economic outlook.
Features:
US01Y/US10Y Ratio: The indicator plots the ratio between the 1-Year and 10-Year US Treasury Yields as a smooth curve.
Dynamic Highlighting: Portions of the curve where the ratio exceeds 1 are highlighted in red, making it easy to identify periods where short-term rates surpass long-term rates—a key signal often associated with economic shifts or inversions.
Customizable Appearance: The main curve is plotted in a light blue color for clear visibility against most chart backgrounds.
Use Cases:
Yield Curve Analysis: This indicator helps traders and analysts monitor the yield curve, specifically focusing on the relationship between short-term and long-term interest rates.
Recession Signals: An inverted yield curve, where the ratio exceeds 1, can be an early warning signal for potential economic downturns.
Market Sentiment: Use the indicator to gauge shifts in investor sentiment by tracking changes in the yield curve over time.
How to Use:
Add the script to your TradingView chart.
The light blue curve represents the ratio of US01Y/US10Y.
Red highlights indicate periods where the ratio exceeds 1, signaling potential yield curve inversion.
This indicator is ideal for traders, investors, and economists looking to incorporate yield curve analysis into their trading strategies or economic forecasts.
Features:
US01Y/US10Y Ratio: The indicator plots the ratio between the 1-Year and 10-Year US Treasury Yields as a smooth curve.
Dynamic Highlighting: Portions of the curve where the ratio exceeds 1 are highlighted in red, making it easy to identify periods where short-term rates surpass long-term rates—a key signal often associated with economic shifts or inversions.
Customizable Appearance: The main curve is plotted in a light blue color for clear visibility against most chart backgrounds.
Use Cases:
Yield Curve Analysis: This indicator helps traders and analysts monitor the yield curve, specifically focusing on the relationship between short-term and long-term interest rates.
Recession Signals: An inverted yield curve, where the ratio exceeds 1, can be an early warning signal for potential economic downturns.
Market Sentiment: Use the indicator to gauge shifts in investor sentiment by tracking changes in the yield curve over time.
How to Use:
Add the script to your TradingView chart.
The light blue curve represents the ratio of US01Y/US10Y.
Red highlights indicate periods where the ratio exceeds 1, signaling potential yield curve inversion.
This indicator is ideal for traders, investors, and economists looking to incorporate yield curve analysis into their trading strategies or economic forecasts.
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
Want to use this script on a chart?
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.