Overview:
A new phase of the market turmoil is at hand. Bonds are no longer proving to be the safe haven for investors fleeing stocks. The tremendous fiscal and monetary efforts, with more likely to come, have sparked a dramatic rise in yields. Meanwhile, equities are getting crushed again. Steep losses were seen in many Asia Pacific markets, with Australia off 6% and , , and down more than 4%. The Bank of Japan’s ETF purchases are distorting the local equity performance with the posting small gains while the fell about 1.7%. European bourses are lower, and the Dow Jones is off about 4% to give back yesterday’s gains in full plus more. The rose 6% yesterday and is giving three-quarters of it back. It has not risen for two consecutive sessions since February 11-12.
In Europe, the more profound carnage is in the bond market today, where Italy’s yield is up over 50 bp. It is approaching 3% after being below 1% as recently as March 4. The German yield is 17 bp higher near…
