Marginal bond funding costs continue to show rising stress. US and EM junk bonds are falling:
In the US, yields are breaking above the 2018 Fed hiking scare crash:
Australian bank funding costs are on the move:
The yield is still low but can move very fast and I expect it too as equity keeps falling:
With GSIBs getting mown down fast:
It’s still early days but spreads are plowing straight through the Fed’s emergency 50bps cut which can do nothing to assuage fears of default as the outlook for all corporations is called into question by viral economic shutdowns.
It’s a huge pile of dry, petrol soaked, timber. If one major firm goes under it will ignite…