Once again we saw excellent commentary and analysis from Nordea’s Andreas Larsen, which we have spoken too and properly congratulated him on his excellent insight. Today Zhedge featured some of his work on the “China Credit Impulse.” This Chinese reflationary surge as Larsen put it would,
“show up in markedly higher ISM readings than what we have already seen. 70-75 readings are not out of this world to think of; after all it just means that three out of four survey participants find an improving environment compared to the month prior. Not unlikely given that we were all locked into our cellars in March/April."
He noted the close link between the annual change in ISM and yields, but the bigger question is how far will the PBOC and FED let yield reflation run? In layman’s terms,
HOW HIGH CAN YIELDS JUMP?
Was the bond auction and yield spike just more supply or a sign of greater moves to come? For our Magnelibra readers here, what this is telling us is that the yield curve will for all …
