An uneasy calm has descended on the markets since the end of the first quarter put a stop to the heavy liquidation in bonds and some gained the sense that commodities were perhaps a little overcooked. The rebalancing and retracements those two entailed could yet run further, but we very much doubt that we’ve seen the last of the inflationary wave.
Category Archives: repo
Markets have paradoxically both been on edge – and in the throes of euphoria – since the repo shock in mid-September, being at the same time alarmed and yet strangely reassured by the Fed’s frantic backpedalling and the $400+ billion boost to its balance sheet which this entailed. Extreme levels of overstretch are everywhere apparent.