As we previously noted, it would appear - unlike the exuberance in the market - the 'taper downside risk' is very much in equity markets rather than bonds [4]. Today's aggressive equity and credit hedging and bond stability perhaps signal more apprehension than a rallying volumeless equity market might suggest but if the following 2 charts are anything to go by, a shift to removing the punchbowl (no matter how biased to longer, lower, forward rate guidance - of course stymied by 2016 economic projection dilemmas [5]) has seen bonds surge and stocks purge...
[6]
Charts: DoubleLine [7] [7]
Perhaps - as we noted earlier - credit markets are on to something [8]?
