The Broken Bond Market – All Noise, No Signal

Jon Alternative Media, Blogosphere, Economy, Fiscal Policies

The Fed tightens on Wednesday and bonds rally. What the hay?
GaveKal, Jeff Gundlach, and Jim Bianco nailed it in that every spec and their mother are/were short 10-year Treasuries.
But this is only a small part of the story: The global bond markets are broken.
There are no signals, there is no noise. Trying to infer any sense of economic or financial information from bond yields is futile.
QE Distortion
The intervention into the bond markets by central banks through quantitative easing (QE) in the big four sovereign bond markets – U. S., Japan, Eurozone, and UK – has created a structural shortage of risk-free instruments and distorted the most important price in the world – the yield on 10-year hard currency sovereign bonds.

This post was published at Zero Hedge on Mar 19, 2017.