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Michel Hartnett at BofA. I agree.
Saturday Night Surprise: On Oct 6th 1979, Fed Chair Volcker hiked the discount rate 100bps to 12% on a Saturday. 10Y UST yield up 55bps, S&P -6.1% following week.
Heard on the Street: “Stocks trading bad news is good news, bonds trading bad news is bad news; stocks trading Fed, bonds trading collateral”. If so, Oct bear risk rally continues with “Goldilocks” payroll, but BoJ can’t prevent new high in dollar-yen, BoE QE can’t prevent new highs in UK gilt yields, risk assets to new lows in Oct.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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