BoI Bank of England's central bank chief warns of recession

Andrew Bailey, the Governor of the Bank of England, addresses the media on the Monetary Policy Report, in London.

Bank of England boss Andrew Bailey is sorry for an apocalyptic view of the world, saying that monetary policy faces its biggest test in 25 years with a surge in inflation exacerbated by war in Ukraine and China's COVID lockdowns.

Federal Reserve chief Jerome Powell, who warned last week that taming inflation will include some pain, and European Central Bank president Christine Lagarde will speak later on Tuesday.

No wonder markets are so volatile one way one minute on the belief that surging inflation will lead to aggressive rate hikes in major economies, the other way the other way is because all this raises recession risks.

A strong hint from Australia's central bank that another rate hike is coming in June is lifting the Aussie dollar today.

It's that growing fear of recession risk that holds sway in the United States, heightened by Monday's gloomy China data. The US 10-year Treasury yields are down almost 30 basis points from 3 -- 1 2 year highs hit just over a week ago.

Stock markets are stable for now. The euro zone GDP numbers, U.S retail sales and industrial production data, however, pose a new test for fragile sentiment.

The unemployment rate fell to its lowest since 1974, at 3.7% in the first three months of this year, which could bring some comfort to policymakers, according to data released early on Tuesday.

While sentiment is largely risk off, commodity prices continue to surge wheat futures and other agricultural goods prices shot up on Monday. There's no shortage of sources of angst right now.