You can ignore and even downplay for a while, but eventually and as sure as the fundamental law of nature that everything has a cost....
We believe Jeffrey Gundlach, et al. are wrong regarding the 10-Year Bond yield staying below 2.80% over the second half of the year.
One major factor to the slow growth/low inflation in the U.S. is the Wall Street Yield Trade. By incentivizing unproductive use of capital, low interest rate via monetary policy is actually deflationary.
Have you become conditioned to always see the negative at the expense of missing the bigger picture?
China is unlikely to show weakness losing face in front of the international community, while it is too late in the game for Vietnam or even the U.S. to back out of the situation.
The interesting part is how the Econ Data and Central Bank events for the next three weeks all directly affect the next event, and how the market digests all these events as a whole.
It is very apparent the Fed literally are making policy up as they go along and Wall Street doesn`t realize that the Fed has no exit strategy. The learning curve is going to be painful as always for Bond Holders.
Despite all the doom and gloom in the market, we would have loved to have these employment numbers three years ago.
Since so many people are still slightly confused about how all the pieces come together in this move lower in yields, we feel the need to add some follow-up commentary.
There has been a lot on bond buying in Europe and that enthusiasm has transferred over to the US in anticipation of Draghi's massive bond buying stimulus program similar to that of the U.S. Fed.
Our response to a question asked by CNBC-- “Why if everybody is talking about inflation is the bond market not moving?
With much hotter CPI & PPI reports the last two months, we anticipate the May reports before Fed's June meeting to be on the high side, and that the Fed will probably have to address these new inflation pressures....
U.S. demand for coal has fallen in recent years and export has become ever more important to domestic coal producers. Asia is the obvious export target, but challenges abound.
To compare Japanese and European bond yields in order to justify an argument for US bond yields staying historically low once the Federal Reserve is completely out of bond buying is a failed comparison.
St. Louis Fed James Bullard said on Friday that he expects the Fed to start raising rates sometime near the end of the first quarter of 2015.