Central Bank Fantasyland and What May Finally End the Party

from King World News

With worries increasing around the world, the central bank fantasyland may finally be coming to an end.

Peter Boockvar: It was only last week that I started to pay attention to Japanese bond auctions but in light of the heightened volatility over the past week, I’m going to keep on paying attention. The 30 yr bond auction overnight was mixed as the bid to cover of 3.04 was below the one year average of 3.36 and the 30 yr yield closed up 2.3 bps to .44%, the most since early April. But, bonds with shorter maturities rallied on the day with the 10 yr yield lower by almost 4 bps to -.08%. The likely end of more interest rate cuts deeper into negative central bank fantasyland and major logistical limits reached in the purchases of JGB’s makes the Japanese bond market right now a must daily watch and possible canary for the world’s sovereign bond markets notwithstanding the actions taken by other central banks…

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