Stress Indicators: Fixed income carnage?

This week the Stress Indicators shows stress in fixed income both in the US and Japan, but also generally. We also see dividend yields for stocks lower than 10 year US rates - indicating a move should soon start back to fixed income:

Meanwhile in '10-year land' - we remain focused on OW - certainly from this level 219 basis points.

 CRB - Commodities seem to have broken down - and the US Dollar index is up:

JPY rates are going up, up and away despite Bank of Japan talk and action:

France bond - OATs are starting to underperform - we like it...

 

Stocks are above their 50-day moving average and stubbornly bid....

Finally, the ultimate risk indicator the AUDJPY - is it looking offered?

Conclusion:
We are most certainly in the eighth inning of a nine-inning baseball game. The pitcher has a tired arm and there is no reliever on the bench. Will the market hit a "home run" off his weak arm? I think so.

The indicators above tell a story of fatigue and the International Monetary Fund and EU Commission have confirmed in their state of the economy forecasts today that they will continue to close their eyes to the reality of Bermuda Economics - going for the all too well known theme of pretend-and-extend - a theme I talked to CNBC about this morning: http://tinyurl.com/pej2hor

 

 

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Economist

 

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