Another dovish turnaround by central banks

Edito In the United Kingdom, B. Johnson has a good chance of becoming the next Prime Minister. The positions he’s taken in the past, the very tight calendar leading up to October 31, fatigue on the other side of the Channel all suggest that the probability of the United Kingdom leaving without an agreement is now quite high. Parliament may well be against it, but the two major parties would no doubt have a lot to lose in early elections. In addition, the central banks have shown considerable unanimity in their pessimistic vision of the future. J. Powell has reinforced anticipations of a reduction in the objective for Fed Funds’ rate starting in July; M. Draghi has reacted strongly to the low level of inflation, and has raised the possibility of digging into the entire arsenal of monetary policy to stimulate it; and the BoE is afraid of the consequences of a “no-deal Brexit”. Added to geopolitical tensions, these positions are pumping up the bond markets: at the global level, the amount outstanding of debt with negative yields has reached 13 TRN USD