by Patrick O’Hare
I had another topic planned for this week’s column, but then North Korea had to go and conduct an underground nuclear test—literally and figuratively. I’m concerned about the ramifications of that test in general, but what concerns me more specifically about that test is the reaction of sovereign bond markets to it.
Basically, there was no reaction to it.
Here we have a rogue nation, with a nutty leader, getting one step closer to being able to deploy a nuclear weapon and what did sovereign bond markets do? They sold off.
There was no flight-to-safety in the sovereign bond markets. Zero. Nada. Zilch.