08-07-2019, 08:09 AM
** 07-Aug-2019 World View: Bond yields falling
There are very long faces on CNBC this morning, at 8:40 am ET, because
10 year Treasury yields fell from 1.72% to 1.63% in the last two
hours.
If bond yields are falling rapidly, it means that a lot of investors
are suddenly buying bonds (as a "safe haven") and selling stocks, and
this matches a 300 point fall in DJIA futures when the market opens at
9:30 am ET.
Steve Liesman on CNBC just rattled off a list of "shocking" things
from the last 12 hours:
German bond yields just fell 4 basis points, with 10-year bund yields
at a record low of -0.58%. (That means that when you buy a German
bond, you don't get all your money back.)
![[Image: 8-7-2019-6-03-02-pm.png]](https://az705044.vo.msecnd.net/20190807/8-7-2019-6-03-02-pm.png)
https://www.forexlive.com/news/!/another...s-20190807
All of these figures are signs of a deflationary spiral and a currency
war. (A country can boost its exports by devaluing the currency,
since that makes the country's export prices lower, compared to other
currencies. When all countries do the same thing, it's called "a race
to the bottom.")
Yesterday, I wrote about a "feeling" of panic that I've been
having. This morning's events extend that "feeling" of panic
for another day.
There are very long faces on CNBC this morning, at 8:40 am ET, because
10 year Treasury yields fell from 1.72% to 1.63% in the last two
hours.
If bond yields are falling rapidly, it means that a lot of investors
are suddenly buying bonds (as a "safe haven") and selling stocks, and
this matches a 300 point fall in DJIA futures when the market opens at
9:30 am ET.
Steve Liesman on CNBC just rattled off a list of "shocking" things
from the last 12 hours:
- India announces a larger than expected 35 basis point
cut. (This means that the Royal Bank of India has reduced
interest rates, making then 0.35% lower.)
- New Zealand, larger than expected 50 basis point cut. (0.5%
reduction in interest rates)
- Thailand, completely unexpected cut of 25 basis points.
- Horrific Germany production data.
German bond yields just fell 4 basis points, with 10-year bund yields
at a record low of -0.58%. (That means that when you buy a German
bond, you don't get all your money back.)
https://www.forexlive.com/news/!/another...s-20190807
All of these figures are signs of a deflationary spiral and a currency
war. (A country can boost its exports by devaluing the currency,
since that makes the country's export prices lower, compared to other
currencies. When all countries do the same thing, it's called "a race
to the bottom.")
Yesterday, I wrote about a "feeling" of panic that I've been
having. This morning's events extend that "feeling" of panic
for another day.
