{"id":1442902,"date":"2023-12-08T18:40:00","date_gmt":"2023-12-08T23:40:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1442902"},"modified":"2023-12-08T18:40:00","modified_gmt":"2023-12-08T23:40:00","slug":"global-rate-correlation-shows-view-central-banks-hunt-in-packs","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/global-rate-correlation-shows-view-central-banks-hunt-in-packs\/1442902\/","title":{"rendered":"Global Rate Correlation Shows View Central Banks Hunt In Packs"},"content":{"rendered":"

Global Rate Correlation Shows View Central Banks Hunt In Packs<\/span><\/p>\n

\n

Authored by Ven Ram, Bloomberg cross-asset strategist,<\/em><\/p>\n

Depending on how you are positioned on rates, there is a virtuous circle – or a vicious cycle – on display in the major global rates markets, with markets feeding off one another.<\/strong><\/p>\n

Correlations between German front-end bonds and comparable Treasuries, usually pretty remarkable, are now close closing in on 0.9.<\/p>\n

Which is to say that much of the shift that we have seen in German front-end bonds reflects what is happening across the Atlantic.<\/strong><\/p>\n

<\/a><\/p>\n

That isn\u2019t to say that recent rally in two-year German securities doesn\u2019t have legs. <\/strong><\/p>\n

Between August and the end of November, the markets tried to push the yield on the maturity below 3% several times – and failed at each of those attempts.<\/p>\n

But with the disinflationary narrative in the euro zone gaining credibility, the current rally is fully sanctified.<\/strong><\/p>\n

The degree of enthusiasm sweeping through the markets may also be seen in front-end gilts\u2019 correlation with Treasuries, which has shot up from deeply negative levels – when UK and Treasury yields were marching in opposite directions – to around 0.7 now.<\/p>\n

<\/a><\/p>\n

Given that the UK has arguably the most deeply embedded and worst inflation outlook among the major markets, one might think that moves in front-end gilts that are in lockstep with Treasuries are hardly justified.<\/strong><\/p>\n

However, there is an underlying message from the markets that speaks to their long-held conviction that central banks hunt in packs, never alone – meaning, should the Fed pivot, so will the European Central Bank and others possibly following in tow.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nFri, 12\/08\/2023 – 13:40<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/global-rate-correlation-shows-view-central-banks-hunt-packs<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Global Rate Correlation Shows View Central Banks Hunt In Packs Authored by Ven Ram, Bloomberg cross-asset strategist, Depending on how you are positioned on rates,…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1442902","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1442902","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1442902"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1442902\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1442902"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1442902"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1442902"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}