As I arrived at my hotel in Madrid late last night, there was a banner hanging above the entry. It said "The hotel staff will be on strike tomorrow for the first time in over 100 years. Not even during the Spanish Civil War did the hotel staff miss a day at work". It was […]

I have a couple more days in Europe before I head to the West coast. I have had some amazing discussions with clients on Europe, the US and China. The diversity of views is staggering and it’s clear that those in the "optimistic" camp have been very frustrated by the US and German bond markets […]

Suppose the Department of Defense had a mission – to take out the government of a rogue nation. For the purposes of this discussion we will call this nation Deflationstan. However, rather than go in with the full forces of the Army, Navy, Air Force and Marines, the Secretary of Defense thought it would be […]

Reading the statement from a cab in London, it appears 3 big changes. First, the inflation paragraph is much more dovish with the addition of a statement on inflation being below the level consistent with the mandate on price stability. Second, the final paragraph explicitly states that they will react with more accommodation if needed […]

The fallout from Japanese intervention continues to be the primary driver of almost all price action. First of all positioning long YEN and CHF in much of the CTA world has created a lot of wound licking. I suspect speculative positions that were largely in “risk off” correlation mode are now much more balanced after […]

The geopolitical fallout from the Japanese intervention has yet to work itself through market psyche yet. The Japanese unilateral move to defend the YEN represents is a HUGE sea change for global capital markets. First and foremost the Chinese foray into YEN purchases in recent quarters clearly did not sit well in Tokyo. As many […]

There will be beaucoup YEN floating around in the system looking for a home!! Not only did the MoF sell YEN (finally), but thankfully the BOJ has coordinated the action to leave the YEN in the system and affect a monetary policy ease. This unsterilized intervention is NOT typical - cooperation by the fiscal and […]

I’ve been in meetings all morning so apologies for being a little late on commentary. As I’m back at the screens it seems like the 1% to 2% 10-year note community has really stepped up the rhetoric today. The push back to 2.85% was enough to bring out the big guns – so we all […]

Surprisingly, global fixed income asset prices were little changed on balance since our last monthly publication. US Treasury and German Bund 10 year yields were about 2.80 and 2.40 respectively on our August publication date, and they are exactly at those levels as we go to print for September. It was not, however, a quiet […]

It was a long a painful August for the bond bears. But the back to school season has been oh so kind. From the August 25th lows of 2.41% we are ending this week nearly 40bps higher! There will be plenty of Japan obsessed folks out there with 2.00% 10 year (and even 30 year) […]