While Citigroup's Eric Lee thinks its "ridiculous" to talk fo a US recession, it appears the macro data and markets would strongly disagree: as Bloomberg reports:
Signals by central banks from Europe to Japan that additional stimulus is at the ready are failing to ease investor concern that global growth will keep slowing.
Following remarks that are identical to those from yesterday, today Yellen will conclude her semi-annual testimony, this time by presenting her vision about the economy and the path of future rate hikes to the Senate Banking Committee. Surprises, if any, will come during the Q&A.
Watch the hearing live below.
http://www.senate.gov/isvp
2Y yields crashed 10bps overnight - the biggest plunge in yields since September's FOMC fold on rate-hikes. The rest of the Treasury bond complex also saw yields crash with 10Y flash-crashing 20bps - amid collapsing liquidity - at its deepest.
Then - as if by magic - a sudden crazed Yen seller appeared and lifted all risk boats (and bond yields) "off the lows."
One wonders how long this 'intervention' will last...
Initial jobless claims dropped notably last week (from 285 to 269k) but the overall trend (away from the noise) appears in tact. The smoother4-week average remains near 12-month highs and as Goldman notes weakness is widespread - "there is only limited evidence that the rise in claims is due to distress in the energy sector." Continuing claims dropped modestly to 2.239mm but, as Goldman adds, "the persistence of the recent move suggests more might be going on, and we are treating the increase as more than just noise."
"Whatever it takes" is not enough, it would appear as the fragility and interconnectedness forced upon the European banking/sovereign finance ponzi has rapidly come home to roost for Draghi and his followers. Peripheral bond risk has flipped from "hold your nose" buys to panic sells with Portugal risk exploding 200bps in the last week. As the European banking system's credit risk rises 2012-crisis-like, it seems belief in a bigger bazooka is fading fast.
It's not just Deutsche Bank...
Smashing European Peripheral risk higher...