Who’s Driving Global Yields – The Fed or the ECB?

Published on
September 26th, 2019
34 minutes

Who’s Driving Global Yields – The Fed or the ECB?

The Expert View ·
Featuring Juliette Declercq

Published on: September 26th, 2019 • Duration: 34 minutes

Juliette Declercq, founder of JDI Research, argues that the biggest effect that extreme monetary policy has had on markets is psychological, and has resulted in a global savings glut. Declercq discusses why her outlook on global markets has changed since the beginning of the year, and demonstrates why monetary policy has not achieved the desired outcome. Considering the ECB and the Fed have doubled down on lowering rates further and "QE eternity," Declercq reveals her forecast for yields, inflation, and equity markets. Filmed on September 19, 2019 in London.



  • IS
    Ionel S.
    26 September 2019 @ 09:11
    Shorting Bund (Ger 10 yr) or Bubl (5 year Ger bond) in a negative yielding world is a " widow maker" trade as was JGB back in '90s. This time is different, right?
    • mg
      michael g.
      9 November 2019 @ 18:31
      It was different ;)
  • DM
    Dheer M.
    23 October 2019 @ 15:16
    Great calls
  • ET
    Eugenia T.
    20 October 2019 @ 11:23
    Brilliant. I always learn so much from her talks. Even if the talk is old, it's still a goldmine of knowledge re: what indicators one can look at and what relationships between them one can expect in different situations. She is also excellent at staying rational and not fear mongering. Second order thinking through and through. Thank you RV for having her, and please invite her again.
  • RS
    Ruben S.
    4 October 2019 @ 13:13
    am i the only one feeling she is trying her best to sell me her research ? to the point that she is not telling much of her view?
    • ET
      Eugenia T.
      20 October 2019 @ 11:20
      She has made it a point on other podcasts she's been on, too--she'll give you her outlook and some general hints, but specific trade ideas will be reserved for paying clients. Which makes sense
  • SK
    Steve K.
    26 September 2019 @ 16:26
    Much more likely that there will be more fiscal stimulus in US than Europe. EU is very conservative on deficit/GDP ratio, while the US politicians and public don't care about the big deficits. Of course Europe needs more fiscal spending and the US doesn't. Whoever wins in the 2020 US Presidential election will do a lot of fiscal stimulus.
    • DW
      Daniel W.
      26 September 2019 @ 18:35
      I think her point is that this will change under the new ECB president.
    • DS
      David S.
      29 September 2019 @ 02:18
      It will just get worse. DLS
    • AC
      Antoine C.
      19 October 2019 @ 06:20
      Daniel the ECB has no authority over fiscal matters
  • CL
    Chris L.
    29 September 2019 @ 03:58
    As Raoul was telling his followers to effectively mortgage their house and put it into bonds and continue to lever up, I advocated and warned that that is playing with fire. I said the same thing Juliette did, and the US 10Y rammed 45 bps off the bottom, and likely will continue. I also told him going back to the Spring and early fall why this would happen (balance sheet expansion i.e. QE). What did yields do when the fed balance ramped in early September? Raouls responce: ignore me and unfollow me from twitter. Hey, just trying to help but to each their own.
    • EK
      Edward K.
      30 September 2019 @ 15:25
      Being prescient is a hard commodity to come by so it is basically a market of opinions. The question is how big a bet do you make and how much conviction you have.
    • RT
      Rex T.
      30 September 2019 @ 18:54
      Hmmm... one needs to be careful when giving investment recommendations on specific securities they are not doing so as an adviser unless qualified.
    • MC
      Max C.
      5 October 2019 @ 22:06
      Eventually, you are right. Just not yet.
  • MC
    Max C.
    5 October 2019 @ 22:03
    For now, Long bonds is still the trade. And gold.
  • DH
    David H.
    2 October 2019 @ 14:57
    Amazing how she brings it all together. In fact, it almost fits too nicely in a box in the thoroughness if its answers. Just because my own wall of worry seeks and fears an inflection point on the buy bonds (and gold), wear diamonds trade, does not mean its necessarily here. Though this seems to suggest i should begin to fade the trade. Hey others, am i hearing this right? Better listen again.
  • CS
    C S.
    29 September 2019 @ 23:58
    Gold, anybody?
    • WS
      William S.
      30 September 2019 @ 23:24
      and SILVER!
  • KS
    K S.
    29 September 2019 @ 00:56
    One of the best macro thinkers. Fantastic interview!
  • AM
    Alexander M.
    26 September 2019 @ 17:50
    You guys at realvision really have a one track mind. All you hear is "bubbles" when in fact Juliette says BOBLs (Bundesobligationen - German 5 year notes). See your summary of the interview at the end of the video. "...positioning her portfolio short bubbles and long US"
    • df
      dwight f.
      27 September 2019 @ 02:55
      I suspect the video is transcribed using AI. Would be nice if they could improve it.
    • RM
      Robert M.
      27 September 2019 @ 14:26
      Good catch. Thought that summary made no sense. She also recommended European equities, which she said was cheap, but was not included in the summary.
    • DH
      Dabangg H.
      28 September 2019 @ 08:25
      Thanks! I was like yeah sure bubbles. Who doesn’t.
  • ly
    lena y.
    27 September 2019 @ 21:21
    Welcome her view from the European angle of the global market! And she is never shy to speak out! Nice, Juliette!
  • MP
    Matthew P.
    26 September 2019 @ 11:38
    Very smart, has an opinion, specific calls, LOVE IT GET HER BACK! Doesn’t matter if you agree or not gotta love the courage and resolve!
    • RT
      Rex T.
      27 September 2019 @ 18:02
      Yes, having views is one part. Getting them right is harder. Making money from them is harder still.
  • RT
    Rex T.
    27 September 2019 @ 16:55
    She is definitely intelligent and well read, but trying to hard to portray that to viewers. She appears to do her own analysis rather than plot of the same raw datas 200 other top PhD economists are using. Moreover, there is an actionable market call. The arguments are interesting case by case but inconsistent in the big picture. We can always fit a story to a past move and get future moves right for the wrong reasons. Some humility would be nice! Central bank economists are far from naive or stupid as is often portrayed on RV.... they don’t call 1 quarter GDP slow down a “recession” because well... it’s not! Ultimately, those in the trenches believe brilliant strat or traders would be making many multiples more running their own hedge fund. I’m curious to learn more from her. Thanks!
  • bs
    bernard s.
    26 September 2019 @ 13:58
    It seems to me that a lot of her trades are dependent on German fiscal policy which is unlikely to happen
    • RM
      Robert M.
      27 September 2019 @ 14:28
      News out on Friday morning saying that some in German favor higher fiscal spending.
  • DS
    David S.
    26 September 2019 @ 18:28
    I am a little surprised that printing money in Europe, China and the US will solve all the short-term and maybe intermediate term problems. I agree that everyone will print money, but do all the bad loans, huge sovereign, corporate and personal debts mean nothing? I agree that all the restraints in the Euro treaty will be reversed, but they were put in for a reason. When countries printed all the money in the 1980s, they were not up to their eyeballs in debt. If you are small like Argentina debt matters. If you are a mega power debt, regardless of amount, does not matter? All the money printing will continue to inflate stocks and hard assets. I guess blowing more and more gas into the ballon is ok. DLS
    • DR
      David R.
      26 September 2019 @ 20:08
      David, don't be such a party pooper. LOL
    • mg
      michael g.
      27 September 2019 @ 08:42
      Actually debt ratios were higher post ww2. JD does not try to advise on whats politically the right thing to do, she advises on what will happen and how to trade it...
    • DS
      David S.
      27 September 2019 @ 11:36
      David. R. - You are correct. I am a downer on this. I wish I were not. Because of RVTV and all the points of view in the comments, I feel most of us will face the crisis. My problem is that I do not see, regardless of how much I try, any way to get out of all this massive debt without devastating the economy and millions of people's lives. Would Greek citizens be better off if Greece declared bankruptcy and have no debt now? Or is debt to infinity better for Greece? All the forced Greek loans were made to save European banks from their own bad loans not to help Greece. Leaders need to agree that there is an overwhelming debt problem and start a meaningful discussion on strategies and tactics to face this problem and slowly turn the ship around. Politicians need to be forced to recognize and deal with the problem. A short time spent on the consequences of the debt problem followed by how to profit from it would have been a major improvement for me. DLS
  • RA
    Richard A.
    27 September 2019 @ 10:50
    Thanks RV for starting to voice over the questions, long overdue, but the coverage is hit or miss. Just do it for every new expert video where we don’t already hear the questions. Please.
  • TB
    Timothy B.
    27 September 2019 @ 09:47
    The dollar is still making new highs though...
  • IS
    Ionel S.
    26 September 2019 @ 09:35
    This lady doesn't know that people QE in Europe is prohibited by the founding treaty of the Euro Zone.
    • SB
      Stewart B.
      26 September 2019 @ 16:16
      So is QE. These rules will be broken. I suspect Lagarde's role is to lift the Eurozone's Stability and Growth Pact which limits fiscal spending. The headache will be German's aversion to monetising debt. However, just like the Brexit referendum, or concerns over immigration, power in the EU/Eurozone is in the hands of the political elite. What the people want will be ignored.
  • JK
    Jay K.
    26 September 2019 @ 13:58
    Insightful. Please invite her back in the future.
  • KS
    Karen S.
    26 September 2019 @ 13:24
    god she's so sharp
  • JC
    John C.
    26 September 2019 @ 09:53
    Good interview, learned some things, generally a pro-Euro/EU economy bent which while I think is a little early will probably prove true in 1H 2020 as the numbers get better and the potential for fiscal stimulus really takes hold
  • IS
    Ionel S.
    26 September 2019 @ 09:28
    The fact that US is converging down to the rest of the World is actually a very very bad news: we risk a Global recession emanating form the US. This is actually bullish UST and US Dollars!
  • IS
    Ionel S.
    26 September 2019 @ 09:21
    Best trade in Europe right now is Short Euro: 1. Macro story = short a negative yielding currency with no/low growth prospects 2. Sentiment story =a small short positioning on aggregate on CFTC and risk reversal trading negative (EURUSD25R3M CMPN Curncy) 3. Valuation Story =small undervalued ( below 1 standard deviation against its long terme average REER)
  • IS
    Ionel S.
    26 September 2019 @ 09:06
    Actually, the QE infinity from the ECB will have a finite 11 month duration as issuer limit for Germany would be reached in roughly a year with a EUR 15 Bn/month programme.
  • FS
    Franz S.
    26 September 2019 @ 07:07
    Excellent discussion!