Overall, a solid 2Y auction pricing at the second lowest yield on record as there was clearly no shortage of buyers for the biggest 2Y offering on record.
The old saying about markets liking gridlock is only true when things are going well (prior point), not when there is a geopolitical shock (1973 – 1974 oil crisis, 9-11 attacks and Gulf War II) or a Financial Crisis (2008).
Point is, if you can just own a shiny rock and outperform all the broad stock indices then what you’re witnessing isn’t really an equity bull market, but something else. Something much bigger...
We have all become “fully invested bears” as we are all quite aware that this will end badly, but no one is willing to take the risk of being grossly underexposed to Central Bank interventions...
"The saving grace for markets is liquidity, which is in abundance and will offer a backstop as the bulls and bears stage a tussle and cause market volatility."
The economic recovery narrative got a solid boost this morning following the latest Eurozone flash PMIs which surged for a second month, in most cases beating expectations.
