Business

Having continued Friday's melt-up as soon as US equity markets opened this morning, headlines from Washington that the corporate tax cuts may be enacted "gradually" reaching 20% in 2022.

As Bloomberg reports, House tax writers are discussing a gradual phase-in for the corporate tax-rate cut that President Donald Trump and Republican leaders want -- a schedule that would have the rate reach 20 percent in 2022, according to a member of the chamber’s tax-writing committee and a person familiar with the discussions.

Another major economy is facing the ugly prospect of rising inflation.

A central theme in our analysis of The Everything Bubble is that Central Bankers are focused on only one thing: maintaining the bull market in bonds at all costs.

The reasons are as follows:

1)   Bonds are what finance the Government’s massive entitlement spending/ welfare programs.

2)   With massive ownership of bonds thanks to over $15 trillion in QE, Central Banks are extremely exposed should bonds collapse (and yes, Central Banks can go bust).

It appears Draghi has done it again. Since last week's dovish ECB QE taper, European sovereign bond yields have plunged and today are accelerating notably lower with Italian 10Y yields crashing 10bps to 2017 lows...

This is the lowest yield since the start of the year...

Even Spanish debt is bid...

And Catalan debt is also being bought..

However, Spain is at its riskiest compared to Italy in 12 months...

Once again Draghi proves - "It's not the economy, stupid"

Authored by Lance Roberts via RealInvestmentAdvice.com,

While I remain long and invested in the markets on behalf of my clients, I focus and write about the significant risks that are currently present. I am fully aware a laissez-faire attitude towards these risks is ultimately likely to destroy large portions of my clients hard-earned, and irreplaceable, investment capital.

Having correctly predicted the dovish relent by the ECB's QE taper announcement last week, whose explicit "open-endedness" appeared to surprise many of his hawkish Wall Street colleagues, overnight Bloomberg macro commentators Mark Cudmore looked at bond yields and concluded that "bond bears have had their fun", as "almost all upcoming risk events are skewed to drive 10-year Treasury yields lower rather than higher."