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US Bond Market Liquidity Collapses: “It’s Worse Than Brexit”


  • US Bond Market Liquidity Collapses: “It’s Worse Than Brexit”
    by Tyler Durden, 
    Two weeks ago we warned of the “unintended consequences” of Dodd-Frank which are likely to crush bond market liquidity. On the day of Brexit we got a glimpse of what can happen when the world’s most liquid bond market suddenly isn’t and as one veteran bond trader exclaimed today, US Treasury market liquidity is “worse than Brexit.”

    Following the worst two-week loss for bonds… ever…

    The bond-market rout triggered by Donald Trump’s election victory has also crimped investors’ ability to trade, according to a Bloomberg index measuring how much U.S. government-bond yields are deviating on average from a fair-value model.
    By that measure, the deterioration of liquidity in Treasuries has been the most severe since the U.K.’s June vote to exit the European Union…

    read more.


November 19, 2016 - Posted by | Economics | , , , ,

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