Recent market events are shaping our outlook:
- The value of global sovereign bonds with negative yields has doubled since last October to $11 trillion in May (only $1 trillion below the all-time high registered in mid-2016). And all this while the US economy is “booming”…
- The US Treasury 30-year bond yield has breached its 2017 and 2018 lows. The yield on the long bond is trading only 0.47% above the mid-2016 bottom and is down a huge 0.9% from its October 2018 peak
- Capital flight into US bonds has accelerated: every bond sector ETF – except high-yield – has surged to a new high in terms of assets
- Metal and mining equities (XME) have plunged to new lows
- The export-heavy KOSPI (South Korea) has given up nearly all the gains achieved in the January-April rally
- A sell-off in copper is testing the important 2016 uptrend-line
To read about how they have affected our outlook please download our CIO note.
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