While markets slowed down modestly ahead of today's key event, the ECB's monetary policy decision and Draghi press conference, there have been a series of notable moves.
This week’s press conference is set to offer little in the way of fireworks with June/July touted as a more opportune time for the ECB to unveil their next stage of major policy announcements. Draghi will likely make some reference to the recent softness in data but ultimately maintain that risks to economic growth are ‘broadly balanced’
"We live in an era that represents an ultimate crossroads for civilization; a time of great uncertainty. Will we seek truth in the trials we face, and thus the ability to create our own solutions? Or, will we take a seemingly easier road by embracing whatever solutions are handed to us by the establishment?"
“Leverage in the U.S. is grotesque for this stage of the cycle. At the moment you’ve got peak leverage at peak prices. It’s not like you have to dig deep to find a problem.”
The rising popularity of passive investing will play a role in making it more likely that correlations between asset classes and sectors will behave differently in the next downturn than they have in the past.
Corporate bond issuance for cash-rich companies, those that until recently held hundreds of billions in cash in offshore accounts, has effectively frozen with not a single bond issued so far in 2018.
If the big story yesterday was the surge in 10Y TSY yields to just shy of 3.00% (2.996% to be precise), then it is only reasonable that the failure of the 10Y yield to rise above 3.00% overnight is today's "big story"...
"A lot of investors that we speak with, when I ask them ‘Where would you want to enter the market and start to buy Treasuries?’ you’re typically hearing numbers like 3 percent on the 10-year, 3.25 percent on the 30-year."
Goldman has hired Justin Schmidt as its new head cryptocurrency trader. Schmidt previously worked at quantitative trading firms Seven Eight Capital LLC and WorldQuant LLC and has computer science degrees from the Massachusetts Institute of Technology
While focus this week will undoubtedly fall on earnings with 181 S&P companies set to report Q1 results, there is also a busy economic calendar on deck with US Core PCE, real GDP, UK GDP, CPI and PMI across the euro area; and CPI inflation data in Australia.
Global stocks stumbled on Monday ahead of an avalanche of earnings in this season's busiest reporting week but the big story overnight was the spike in 10Y Yield which climbed as high as 2.9957%, the highest level since January 2014.
If the past is about to be repeated, all those momentum-chasing traders and strategies that got crushed in the stock market in February, only to find some respite in the oil market, are about to be demolished once again.
