• Meanwhile in markets, Treasuries are extending Friday’s gains on bad overnight economic data from China. Note that the rally started after data on Friday showed US consumer confidence collapsed in August. And for a change bad news isn’t good news for equities. That might have something to do with the fact that Fed tapering is a done deal and that the PBOC isn’t expected to go overboard with easing.
  • At pixel time the 10y Treasury yield was trading at 1.25, down no less than 12bps from last week’s highs. JGBs are showing a faint pulse too, with the 10y falling and now almost back at zero. Surprisingly, Chinese sovereign yields are extending their increases – which we would blame on expectations of some token PBOC easing (reserve ratio cut). Asian equity markets are mostly lower, with losses ranging from 0.4% for Sydney to 1.7% for the Nikkei. S&P 500 are no less than 0.2% below their all-time high. Panic!


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