[vc_row][vc_column][vc_separator border_width="5"][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

Good evening everyone.

I watched the treasury auction results with fair interest today.

With a bid to cover ratio of 2.38, meaning there were 2.38 times more demand than supply, thats a nice market to be selling to in any business, especially the government debt business!

And the US treasury sold a record amount in 30yr paper, so even the long end of the curve has a solid bid?

The question is this...

Why is there such demand for save haven assets, when the economy is supposed to be singing at the moment?

I mean, you could just go buy tesla bonds, or get right out into the dark waters of the junk bond world.

Why go for the safe bet in a time of reckless abandon?

Does the demand for US Govt paper align with the shift to a more risk averse attitude in investor psychology?

Here are a few charts from Hussman Funds which may add some insight.

The periods in Red speak for themselves, this lines up well with the long term wave count in as much as both predict the next market phase as down.

The estimated 12 yr total return for stocks now lies at about -2.5%.

Yes, this outlook suggests that the market will either flat line for the next 12yrs,

Or, undergo a severe correction and recovery period, which ends up at a a negative total return.

Either way, it's far from a good outlook.

So,

Why is there such a demand for safe haven assets?

Maybe there are few shrewd actors preparing for a shift in the markets by selling off risky paper and lining there pockets with treasuries??

That might also explain the return to dollar strength?

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_separator border_width="5"][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

UPCOMING RISK EVENTS:


USD: Prelim UoM Consumer Sentiment.
EUR: ECB President Draghi Speaks
GBP: Halifax HPI m/m.
JPY: N/A.

[/vc_column_text][/vc_column][/vc_row]






[vc_row][vc_column][vc_separator border_width="5"][/vc_column][/vc_row]