Via BMO Capital Markets:
There are moments of inflection in the market when the phrase ‘prices have changed more than the facts’ becomes particularly apropos and today’s Treasury rally ostensibly qualifies. We’ll caution here however that the devolving macro narrative is very consistent with with such a repricing.
The overnight round of Asian central bank cuts combined with the weakest yearly change in German industrial production since 2009 are symptoms of changing expectations rather than the root cause of the move. Nonetheless, 10-year German yields dipped as low as -0.613% to a fresh record low. The selloff in domestic equities offers echoes of Q4 2018, with the primary difference being the Fed just cut rates versus the December hike-too-far
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