PremiumGoldman's Macro Clients Are Rattled By The Speed Of The Bond Rout...
There is a difference between a bond market that reprices and a bond market that lurches, and according to Goldman's Louis Miller, his clients have spent the past week explaining it to him.
Miller, a managing director on the bank's GSX desk, spent the week in macro client offices alongside US thematics specialist Faris Mourad, and in his latest Global Reflections note (available to pro subs) he reports what he heard. The first takeaway is that the pace of the rate rise matters more than where yields end up: the roughly 68bp jump since the end of August is what has people concerned, and the same move spread over six months would have been received very differently. The second is that oil and rates, which had been trading as one asset, have stopped doing so, and that this has unsettled a lot of people. The third is that nobody claims to be able to handicap de-escalation in the Gulf.