The first conclusion is a simple one: little matters more in world markets right now than views of the select group invited to Portugal by the ECB. “Central bankers have us at their beck and call again,” says Brad Bechtel at Jefferies International.
What they were trying to communicate, says Bob Michele, head of fixed income for JPMorgan Asset Management, “is that the 30-year bull market is over and things should go back to normal”.
PG View: The worry of course is that they’re calling the bond market rally over very, very deep in the business cycle. Additionally, higher yields are going to make servicing the trillions and trillions of new debt added since the financial crisis really difficult.