I saw Roger H answered re 10y UST below. I guess I just wonder if long dated UST s are going to continue sell off as the prompt market and real economy sucks more and more cash?

Here at 8am UK time (European open) - long end US yields shoot up again, USD rallies, equities sell off. Funding still an issue (TED Spread wider again yesterday e.g. 1mth govt vs 1mth LIBOR). 3mth USD JPY basis (swaping JPY into USD) still gyrating wildly. This all looks like funding/VAR/smart beta blow up

Thanks a lot

General question: rumour mill has it that one of the big guys are imploding now hence this bond market disruption. Likely candidates are Citadel, Bridgewater, Millennium, AQR, 2 Sigma & a few others. Forced liquidations. Any insights from the Realvision grapevine and will we ever even know? Also would be interested in your views on Eurodollar futures given how they have actually moved down despite the 100 bps Fed cut on Sunday. Realize the dollar squeeze is a big deal, but will the swap lines help alleviate the tension eventually? Thanks.

I'd consider changing docs if I were you.

Probably the same kind of doctor that still smokes and is overweight.

Trouble is there are plenty of other doctors saying the opposite. My doctor also said he thought this was a media driven crisis and it wasn't that much worse than flu. Are our governments and their advisers really that poor...... They must know that the impacts of economies are huge. Are the Italian reports "exaggerated" and media report and health worker reports wrong?

I do realize that this is a stupid question but its worth thinking about in the coming months

unfounded fears from massive printing's effects

Here are a few thoughts on how this market has evolved and how some of the relationships have started to change: Stage one was risk off/repatriation: that saw bonds rally; JPY, EUR and CHF rally vs USD (but EM and commodity FX sell off); equities weaker. US equities generally outperformed during the sell off. This was largely the price action until the middle of last week. Stage two is VAR shock/funding issues: USD starting to rally vs JPY, EUR, CHF (EM and commodity FX still fall); bonds sell off, equities still under pressure (despite countercyclical rallies). US equities have underperformed this week (though much of this is giving back Friday's late squeeze). Central banks are trying to halt this stage by using exceptional policy measures. The weakness in bonds (higher yields) has generally been taking place on days when the dollar has rallied across the board. The bond weakness is not due to inflation expectations. Oil and copper have continued to fall. 10 Year inflation expectations have made new lows, meaning that US 10 Year real yields have soared from a -100bps low last week to +40bps yesterday (side note: gold performed remarkably well yesterday given this huge move higher in real yields) (nominal yields = inflation expectations plus real yield). Expectation of issuance is also driving some of the move – an expectation that a fiscal stimulus will lead to excess supply. Another unusual dynamic over the last 10 years has been that yields have risen once QE has been announced and commenced ($700bn of Treasury and Mortgage Backed QE was announced at the weekend). BUT this dynamic for QE leading to higher yields has usually occurred when QE was combating periods of soft growth, rather than an outright crisis. If QE is an attempt to dampen volatility, including bond volatility, it has so far failed this week, so I don’t think that this historical dynamic is the driver today. Overall I think the margin call/unwind impact is the major driver of bonds at the moment, plus convexity has been making the moves extreme in both directions (buying begets buying and vice versa). The funds that were buyers of bonds and equities on the way up are now mechanically forced to sell bonds.

Thanks Roger H. Good analysis. A lot of moving parts. DLS

Yes, great stuff.

Its worth being aware that it's quarterly expiry week (VIX March futures expire today and US/European index and equity options expire on Friday) which has probably helped accentuate some of the market moves in equities. We have seen many instances of reversals (in both directions) around these expiries (the quarterly expiries are March, June, September and December and tend to have much higher volumes/open interest than the other monthly expiries) BUT it's not a statistically relevant observation. I factor the expiry potential into the framework, rather than use it as a hard and fast rule.

Amen David, well said. problem is most govt/administration lack the fortitude to "enforce" the other side of the equation when times are good, even here in HK, business leaders run unchecked until the next crisis.

Agreed! We say we are "capitalists" but the minute things go poorly, we demand bailouts. If we do not punish the bad actors - then we are sanctifying criminal behavior. To bailout airlines, banks, hedge funds, pseudo-banks, etc. who sold their companies (and our economy) down the river so their execs could get huge bonuses - without demanding REAL change and clawing back their ill-gotten gains - would be the biggest mistake we could possible make.

We do not need chaos. We need to have a functioning economy during and after the virus. We need to be smart. Any government loans to corporations need to be ahead of all other creditors. In 2008 all the banks wanted to pay off the loans ASAP and they did. The banks are solid now because rules were put in place. If the market had not forced the Fed to change course in interest rates, the market would have gone down anyway. The banks, however, would have some room to make money. Let's work together and try to be smart about it. DLS

To avoid getting in to the mechanics of the website, the short answer is that putting this out with a dummy video allows us to get you the actual video the instant it is ready. The description above gives a full explanation.

Max W. Understood. My point, not clearly made, was to the placeholder out there (as you've done) and instead of saying: ....released that same day, with the goal of having the show out before 6:00 p.m. ET. - just hold it and release at 6:00 p.m. even if it's done earlier unless it's some kind of special edition. Really enjoy the Service.