Epstein Secrets

uities could go nowhere for years to come. Fixed Income • Yesterday was a study in central bank contrasts, with the ECB sitting on its hands, while the Bank of Japan launched the most aggressive easing at a single meeting by any G-4 central bank. The BoJ surprise came in both the size of its programme — it will

l of other major central banks. Today's disappointing US employment report may put that shift on ice, removing what had been a building headwind for Treasuries. Equities • Global equities are down on the week due to weaker than expected US activity indicators. The MSCI AC World index is down almost 3% fro

e appreciation of the yen, once again pushing the Bank of Japan’s (BOJ’s) 2% inflation target further into the futu

u of Labor Statistics BOE: Bank of England BOJ: Bank of Japan CAGR: compound annual growth rate CDS: credit de

e income. In the sections that follow, we review the specifics of each fixed income market. US Treasuries While 2016 began as a bumper year for US Treasuries, it ended in a rout. The yield on 10-year Treasury bonds, for example, reached an all-time low of just 1.36% by the middle of last year before joltin

75 70 65 60 55 50 1/1/2010 5/1/2011 8/4/2012 = 1/1/2014) 5/1/2015 = 9/1/2016 Source: BofA Merrill Lynch Global Research true against the JPY given the Bank of Japan is pegging 10y JGB yields at zero. We are cognizant of the possibility that the willingness of Japanese investors — who have already bought record am

nks hold a 10% capital ratio. This plan would probably decrease the availability of leverage, and could also result in reduced demand for short-dated Treasuries in HQLA portfolios. Another risk to 30y swap spread normalization in particular would be a material increase in deficit spending as part of a fiscal