US survey-based PMIs have surged to their highest levels since April 2011 in the last few months, seemingly signifying to all that the US economy is chugging along nicely and escape-velocity-driven nirvana is right around the corner. There's just one thing... the bond market is calling bullshit!
The last time this kind of decoupling happened was in 2014... and that did not end well for PMIs and the economy, which slumped to catch down to the leading indications of bonds.
However, as Bloomberg reports, equity market participants seem to have put all their faith - once again - in The Fed and soft survey data.
As Pictet Asset Management notes so authoritatively, ultimately the divide should close and it is the bond market that will take the hit, as there is nothing in the medium term to derail global economic growth.
We shall see.