from Zero Hedge:
Some unpleasant observations from Deutsche Bank below for fans of either central planning and/or risk assets, as having one’s cake and eating it too is no longer an option, and one or the other is finally set to snap. To wit: “Yield curves are very steep suggesting a challenge to central bank guidance credibility is at a tipping point. Either the data really are strong and the central banks lose credibility soon or the markets have overstretched themselves, allowing for a partial recovery in lower rates.” A “tweeted out” Bill Gross is praying to the Newport gods it’s the latter.
More from DB’s Francis Yared and Dominic Konstam:
We don’t think a move to 3 percent or higher in ten year yields is sustainable in the short run since it more likely than not undermines riskier assets. 5y5y approaching 5 percent should trigger real money “buying” interest at the expense of riskier assets. 5y5y can eventually get to 5 or even 6 percent but only when nominal growth is that much higher.
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