Any Economic optimism priced via US treasury Curve steepner being unwound this morning as Risk Of back with an attitude. Powell did not sound optimistic about a Quick recovery from Virus, headlines from BBG are making people realize that the pandemic is not over “States including Florida, Arizona, Texas and California are seeing signs the pandemic is continuing to spread and “More than a dozen states are showing new highs in the number of covid-19 cases or hospitalizations” and this one a bit scary from @ScottGottliebMD “The more concerning part is they haven’t been able to isolate what the source of the infection is.” Green shoot turning Brown!
Dow -3%,Nasdaq -1.6%,Stoxx and Dax -3%,Mib -3.5%,NKY -2.8%Cl -5% Brent -4% gasoline -4.6%.Dollar bouncing as it should as it is the barometer of Risk on and off .30 year yields -5 bps Gold Steady to higher due to dollar strength. Bunds +100 ticks Yields -7 Bps All EZ 10 year yields down on day. A bit of correction in the underlying short-term trend caused by Virus worries and less then Optimistic Powell
5 years are the new 2 years as fed has locked down Zero bound rates till at least 2022.More then one source discussing this