Last
Friday afternoon, when what few traders were not on vacation were
planning the venue of their evening alcohol consumption, we showed a remarkable analysis by Bank of America, which found that yields on the $27.8 trillion non-USD global
investment grade bond market had declined to just 16bps and that the US
share of global investment grade yields has climbed to 94%. But the
punchline is that, as we said, "non-USD sovereign yields had
dropped to just 2bps, meaning that any day now foreign sovereign debt
may have no yield at all on average."
Fast forward to Monday, when following another surge in global bond
prices, Bank of America refreshed its analysis, and foudn that the
striking trends noted last week had become even more fascinating, to wit
yields on the $27.8tn non-USD global IG fixed income market had
declined to just 11bps (down from 16bps just one day earlier)...
... and the US share of global IG yields climbed to 95%...
... meaning that any foreign investor who is desperate for even the
smallest trace of positive yield has no choice but to come to the US,
something Kyle Bass echoed earlier on CNBC: "US rates are going to zero
because they are the only DM yields with an integer in front of them."
But the biggest shock is that for Albert Edwards, vindication is here
if only outside the US for now: as per the BofA update, non-USD
sovereign yields on $19 trillion in global debt - which was a paltry but
positive +0.02% on Friday - have now turned negative on average for the
first time ever at -3bps.
The silver lining: for now the average US sovereign yield is like a
beacon for foreign investors, offering a "juicy" 1.59% but we fully
expect this number to keep dropping as offshore pension funds rush to
lock in positive yields while they can; naturally any further Fed rate
cuts or "some QE" will only bring the US D-Day that much closer.
It's not just us: commenting on the Japanification of the world, Bank
of America's Hans Mikkelsen wrote that "we continue to think there is a
wall of new money being forced into the global corporate bond market"
and adds that "the trigger is lower interest rate volatility or simply
the passage of time, as a lot of foreign investors are being charged
(negative yields) for being underinvested."
Amazonで買物をしてContrarianJを応援しよう Albert Edwards: This Was The Final Recessionary Shoe, And It Has Now Fallen by Tyler Durden Thu, 06/27/2019 - 12:45 Exactly three months ago, in late March, the 3 month-10 year spread inverted for the first time since 2007... ちょうど3か月前の3月遅くのことだ、3M10Yスプレッドが2007年以来初めて反転した・・・・ ... an event which sparked near-panic in the market as historically curve inversion has preceded the last 7 recessions. ・・・市場は準混乱状態になった、というのも歴史的に見てイールドカーブ反転が過去7回の景気後退の前兆となっているからだ。 However, while the inversion was certainly a memorable event, the question on everyone's lips is how do risk assets perform once the curve flattens and/or inverts. According to backtests from Goldman, since the mid-1980s, significant stock drawdowns (i.e. market crashes) began only when term slope started steepening after being inverted. ...
Powell Keeps The Bond Bull Kicking Written by Lance Roberts | Mar, 21, 2019 In a widely expected outcome, the Federal Reserve announced no change to the Fed funds rate but did leave open the possibility of a rate hike next year. Also, they committed to stopping “Quantitative Tightening (or Q.T.)” by the end of September. 多くの人が予想したとおり、FEDはFFR変更をしないだけでなく来年も不明とした。さらには、QTを9月末に終えると約束した。 The key language from yesterday’s announcement was: 昨日の発表の重要な部分はこういう具合だ: “ Information received since the Federal Open Market Committee met in January indicates that the labor market remains strong but that growth of economic activity has slowed from its solid rate in the fourth quarter . Payroll employment was little changed in February, but job gains have been solid, on average, in recent months, and the unemployment rate has remained low. 「1月のFOMC以来の情報を分析すると、労働市場は強いがQ4に比べると経済成長は鈍化している。2月の雇用環境にほとんど変化がなかった、ここ数ヶ月確実に雇用は増えている、そして失業率は低いままだ。 Recent indicators point to s...
Amazonで買物をしてContrarianJを応援しよう "On The Precipice" by Tyler Durden Mon, 06/24/2019 - 14:30 Authored by Kevin Ludolph via Crescat Capital, Dear Investors: The US stock market is retesting its all-time highs at record valuations yet again. We strongly believe it is poised to fail. The problem for bullish late-cycle momentum investors trying to play a breakout to new highs here is the oncoming freight train of deteriorating macro-economic conditions. 米国株式は記録的バリエーションのもとで再度過去最高を試している。私どもはこれが失敗すると強く信じている。景気拡大終盤で強気のモメンタム投資家が新高値を試そうとしていることの問題は、マクロ経済条件の悪化にある。 US corporate profit growth, year-over-year, for the S&P 500 already fully evaporated in the first quarter of 2019 and is heading toward outright decline for the full year based on earnings estimate revision trends. Note the alligator jaws divergence in the chart be...