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The G7 meeting at the weekend spotlighted a growing rift between the US and its key allies, with German chancellor Angela Merkel saying that Europe can no longer completely rely on the US and UK. GBP is on the back foot due to the tightening of opinion polls in the run-up to the June 8 election.
Article / 16 June 2016 at 10:30 GMT

Macro Digest: US 30-year bond wins big on Fed

Chief Economist & CIO / Saxo Bank
Denmark
  • Fed's dithering has meant solid gains for the 30-yr T-bill
  • Yellen and her colleagues face a credibility questionmark
  • Best advice is never to heed central bankers
  • Central banks invariably do to little, too late
yellen
 You may talk away but we've got our headsets turned off. Pic: Federal Reserve

By Steen Jakobsen

The hawkish tilt that the Federal Reserve took at its April policy-setting meeting has had one major beneficiary – the US 30-year Treasury (charts below).

Fading the Fed is the biggest money winner this year – again – and questions are increasingly being raised about the credibility of  central bank chief Janet Yellen and her colleagues. 

For the rest of us, the rule of thumb for central banks is this: Don’t listen to what they say, but observe what the do…(which almost always is nothing, too little or too late).
 
 US 30-year government bond:
30-year
 Source: Bloomberg

US
 Source: Bloomberg

dots
 
fed
 
Some more charts worth noting:

iTraxx

The bank sector is under attack again...

banks

 Euro downside is increasing due to Brexit…

euro
Europe growth leading indicator is point to SIGNIFICANT slow-down – Ie: Brexit vote yes or no is already having a negative impact….
 
opinion polls
 – Edited by Clare MacCarthy

 

Steen Jakobsen is chief economist and CIO at Saxo Bank


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