Panic Stations
Comment of the Day

August 23 2019

Commentary by Eoin Treacy

Panic Stations

This report by Charles Gave for GaveKal may be of interest to subscribers. Here is a section:

Eoin Treacy's view

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The massive move we have seen in European sovereign bonds is definitely representative of a buyer’s panic but the broader question is who is panicking? Pension funds and insurance companies spring to mind. What are they panicking about? There is a real prospect we are going to see the ECB announce negative short-term rates as well as a raft of additional measures which are clearly designed to boost liquidity but will come at the expense of savers. That suggests what we are seeing is potentially a buy the rumour and sell the news phenomenon.

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