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Highlights
US – Consumer Confidence contrasting moderate growth
EU – Data and inadequate political solutions presenting a scary picture
JN – Jobless Data improves, Industrial Production & Retail Sales decline
UK – Uncertain Q3 GDP Estimate
CA – GDP continues to expand
AU – RBA finally eased
NZ – RBNZ not clear about tightening
By the end of QE2 the curve had adjusted to the Fed having taken out pretty much all of the new supply out to 10 years.
After QE2 the supply out to 10 years started to be replenished auction by auction.
This was quickly followed by twist which began working to remove supply from the long end and add it to the short end.
The net is an ongoing multi trillion shift taking supply out of the long end and adding it to the short end that will continue to be a major influence on spreads.
Additionally, the Fed is seeing no material evidence of any monetary derived inflation, credit expansion, escalating inflation expectations (not that they actually matter), etc. and they are also seeing the global economy gradually slowing, and the euro zone imploding. So higher rates from the Fed remain a highly unlikely scenario.