No Fiscal discipline, #duration unloved! JGB 30's 3.2%, UST 30's 5.1% / USD down, Equity risk ! / SPX5900+ top
- Stéphan
- May 22
- 3 min read
Bond, the name is Bond ..
Markets : Trump's budget deal worrying bonds/usd/equity.. (rightly so, huge increase in debt etc, $37trn we are nearly there on our way to $50trn by 2034), Bessent no talk about JPY with JPN at G7 (really?), SPX5900+ top right on VIX expiry day...Trump & Ramaphosa meeting was quite something (not too dissimilar to Zelensky's meeting..) >>> duration risk getting into inflection point and about to create or unlock some other issues across markets, precious metals breaking up, BTC all time highs, what else!
#JGB's : suddenly the whole world is watching Japan's JGB's and JPY, why ? because it matters hugely, long-term carry etc #CHFJPY lower, pick your trade vs #JPY, a reminder that authorities want to avoid a 'TWD' like move in other major USD pairs... you know that are never ever supposed to happen, things like Oct 1998 in USDJPY (many others, just an example)
BOJ should step in only in a 'severe' bond market rout, policymaker says
Nike to hike prices as it faces tariffs uncertainty, another one in a long list of companies rising prices, quite substantially in some cases (WMT cutting jobs, Tech side too)
Hassett said that the "big beautiful bill" will get the US to 3% trend growth against the 1.8% assumption from the CBO >>> all fiscal discipline has been abandoned >>> It is ALL about growth now
Israel : suddenly, something is shifting, some sort of moment of judgment coming
$1trn Kuwait fund’s boss sounds warning on private equity
Bessent, Kato did not discuss FX levels at G-7, US Says >> small bounce to 144 overnight and right back down #USDJPY
For the first time in modern financial history, Greece is borrowing at lower interest rates than the United States — even for 30-year bonds. - let that sink in...
US Secretary Scott Bessent and Japanese Finance Minister Katsunobu Kato did not discuss foreign exchange (USDJPY) levels during their meeting in Canada (really...). However, they “reaffirmed their shared belief that exchange rates should be market determined and that, at present, the dollar-yen exchange rate reflects fundamentals”
Their discussion involved issues relevant to the US-Japanese economic relationship, including global security and the ongoing bilateral trade discussions between the two nations, the department said
UST 10's 4.6, 30's 5.10%... >>>> debt, debt, and more debt... no fiscal discipline... this is what is happening: Investors are worried about the US fiscal outlook. The bill is expected to add at least $3tn to the national debt over the next decade. Their fears were also reflected in a weak $16bn auction of 20-year Treasuries, which were sold at their highest interest rate since 2020. Primary dealers — banks required to buy any unsold bonds — purchased 16.9 per cent of the offering, above the average of 15.1 per cent. One analyst noted: “Markets really have no appetite for duration here.”
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