Business

A serial deadbeat (Argentina) got investors to buy 100-year bonds, Sri Lanka’s latest debt sale was oversubscribed by 10 times, tiny Belarus is poised to issue eurobonds, and even Papua New Guinea, the impoverished Pacific Island nation, is planning its overseas debut in the second half of the year.

But, as Bloomberg reports, that's just a small sampling of the risks emerging-market investors have started taking, even as yields remain relatively thin.

Authored by Ben Hunt via Epsilon Theory blog,

With everyone suddenly back on the deflation (or un-reflation, or disinflation) bandwagon, is it possible that the crowd will once again be caught wrongfooted? According to RCB's Charlie McElligott the answer, not surprisingly, is yes and in his latest market note, the cross-asset strategist says ignore the noise coming out of the Fed and focus on China instead. He explains why below:

SUMMARY:

The number of oil rigs in America has now risen for 23 straight weeks (and 50 of the last 52 weeks), up 11 to 758 in the last week - the highest since April 2015.

"It’s becoming bearish mania," said Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago. "If we keep going down, we’re not going to be adding rigs in a few months, we’re not going to be adding production"

And we suspect, given the lagged reaction to prices, that inflection point in rig counts is close...

Via Global Macro Monitor blog,

Lots of hand wringing these days about the flattening yield curve.  We still maintain our position that the signal from the bond market is significantly distorted due to the global central bank intervention (QE) into the bond markets.   See here and here.