An influx of new fixed income supply over the coming four plus years is going to have a difficult time finding enough increased marginal demand to fill the void left by central banks gradually winding down their balance sheets.
“Revenge of the Savers:” The Real Reason Behind Demand for Bitcoin and Other Decentralized Digital Currencies
The main driver of cryptocurrency demand, which we describe as “revenge of the savers,” is what concerns central banks, governments, and too-big-to-fail banking behemoths such as JP Morgan Chase.
ECB dovishness only reinforces the notion of a central bank behind the curve with yield suppression reversal pressure mounting until the data begin to reinforce the jawboning.
What has been overlooked by most are the strong back-to-back personal income figures of 0.4% m/m in May and 0.3% m/m (revised from 0.4%) in April. While April was revised a tick lower, May’s rebound capped off an impressive two month gain of 0.7% in personal incomes.
Emerging markets are experiencing steady capital inflows and currency appreciation on a broad basis, with a few exceptions.
USD Soft Patch to Set the Stage for Another Grind Higher in Asset Prices and Interest Rates