This is a follow up to my blog Depression is Coming.
It is happening, history is unfolding before our eyes…
First stages of the Bond Market Crash
Deutsch Bank and Reuters have pointed out, this is the biggest and fastest weekly drop in Bund history.
Bund future -450 ticks this week (-700 in last two weeks), biggest fall since German reunification:
Japanese Bond yields to 2-month highs…
On currency manipulations, first, Norway’s central bank left rates on hold, for now…… the krone stabilized after gaining about 1.25% against the euro.
Then the good old Vietnam Dong, ever wonder why Banks in Vietnam pay 17% on deposits? This is more due to the fact that no one really wants the currency. The State Bank of Vietnam devalued the dong for the second time this year in a bid to spur exports and accelerate economic growth. Mind you that is better than the normal 20% adjustment.
From Bloomberg, The central bank weakened its reference rate by 1 percent to 21,673 dong per dollar. The Vietnamese currency is allowed to trade as much as 1 percent either side of the daily fixing, which was also cut by 1 percent on Jan. 7.
Oh, forgot the land down under, Reserve Bank reduced rates by 0.25% and on top of that the Australian jobs data was somewhat disappointing.
Now this is the weirder part of all the sell off in German Bonds, Dax dropping and general calamity in Europe and elsewhere.
Then Euro gained ground against the USD….
Think about that for a second…. The EUR jumped in value, not only that all currencies are strengthening against the USD…
Now technically this should not happen. Quantitative Easing by Japan, Europe Central Bank plus the currency wars being played out with all currencies should have had a negative effect for their currencies against the USD.
Weird shit indeed, everything tried by every Central Bank is having no effect on weakening their currency.
What will all these Countries do now?
The multi zillion dollar question.
Sorry have no friggin clue….. Like all these Central Bankers are scratching their collective arses going WTF!
This is a dramatic position underway in European Bond market and the free cash appears to be the key factor lifting Japanese and US bond yields. It is not the US data, as I have stated before the US is in a recession. Then we have Yellen yelling that the US long-term rates could rise after the Fed lifts the Fed funds target. Like what does she know, the market is dictating the rates, not the Fed.