For interest rates the yield curve will steepen (short term rates falling) and stocks will fall. Those 2 together would be my leading indicators of recession.
Banks are generally a bit more robust than in 2007 but there are weak ones in Europe, such as Deutsche Bank which could fail early on.
I think the biggest bubble this time round is corporate debt and that market will be one of the early major implosions.
Yields will explode on riskier debt. You can see the same during the financial crisis in this chart.
I’m not sure what will happen at first to rates on long term government debt. If we’re talking the periphery of Europe they will likely rise because that debt is seen as risky. For debt of “safe” issuers though (ie Germany, US) yields normally drop as investors seek safety. However I think the multi decade declining trend in rates may be coming to an end because the world has been saturated with so much debt enabled by ultra low rates. If long term gov yields rise in a crisis it will represent a very dangerous condition.
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