Macro Themes At Play
Theme 1 - Fed's cutting window closing?
Theme 2 - If the Fed don't cut in June, the POTUS election complicates the arithmetic
Theme 3 - As the Fed's window closes, the ECB's opens
Further reading and listening of note
Theme 1 - Fed's cutting window closing?
The fixed income market has been drifitng wider through April as the strength of the US data pushed back against the Fed's 3 cut mantra. 4.5% has been named in many a piece as a "trigger" level, a risk level for fixed income moves to finally feed into VAR models and encourage/expedite equity de-risking. The 3bps tail for this evenings auction will also worry investors and bond vigilant’s may soon reappear on FinTwit after their Q1 hibernation as 10s close > 4.55%. Will the Tax window also encourage equity selling?