An Unkind Bond Unwind

Summary

• What might happen in the event of a rapid market adjustment that causes term premiums in bond markets to revert to historical norms and credit risk premiums to normalize.
• The potential confluence of recent market developments in corporate and high yield credit spreads, US 10-year T-bond and the dollar.
• Dollar macroeconomics; an estimation of the U.S. dollar carry trade; why the dollar rally is not due to an economic recovery; how a dollar bull run could play out in.
• With declining liquidity and potential systemic mismatches: what happens if investors decide to get out through crowded exits? Is there codependency and who gets hit?
• These developments could effect numerous commodities, Forex and bond-related mutual funds, ETF's and stocks.

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