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Stocks Thump Yields as Growth Looks on
A fresh episode of soaring stocks relative to benign yields while growth remains benign. Central banks can buy time for sovereigns as they did for banks in 2008...but for how long?
Yes, it has been corrected. Thank you. Especially Optn Twist. Re your last question, i see that later in Q1
raciops,
Yields would rise if i) growth expectations improve ii) fiscal deterioration escalates to threat of more downgrades. This all may be applicable, but may be offset by weaker growth & disinflation.
cmetalli,
It's not a bad idea. Best to to GDP-weighted spreads vs EURUSD, kinda like baste of PIIGs spreads.
Ashraf
It would appear to me the below should read as follows:
"As long as the European Central Bank, the Federal Reserve and the Bank of England continue to FLATTEN their own yield curves via LTROs, Operation Twist and QE3 respectively..."
Operation twist and LTRO have nothing to do with instigating inflation, one would presume...
Would be interested to know your view given that macro data out of the US is very much likely to deteriorate (word has it so) next month