In Bonds there is truth. While government bond yields have risen some 40-50 basis points since the Iran War, and yield curves have steepened, we are not in crisis territory yet. However, the risks of “higher for longer” rates, and sustained inflation have risen. These will impact credit markets and potentially trigger a cascading corporate crisis – leading to all kinds of hell that governments and central banks are now ill-equipped to deal with.

Why are markets so high when the global outlook, trade and domestic politics look so vulnerable? Is it because investors perceive that corporates hold such power in the economy, they now set the agenda? What the global economy may need is a reset, but at present there are few signs the problem of power and wealth inequality will be reversed or addressed.

Damn the torpedoes! Full steam ahead. The recent 10-year Gilt auction was a screaming success. There is plenty of demand at the right yield – 5% for 10 years! The cost of servicing debt is high, but to create growth the government needs to fix the economy by borrowing more. Global investors know that when assessing the UK’s yield premium. The UK would do better to borrow more rather than less!

Did someone say Century Bond? What’s not to like about the bond market? Rates are going to fall! Everyone wants to buy credit (at historically tight spreads) and the biggest most successful firms on the planet are paying 70 cents over Treasuries for your money! What could possibly go wrong?

The nomination of Kevin Warsh as next Fed Chair has been rationalised as positive for stability and managing Trump. But will a new name on the desk means certainty will return? Nothing really changed within the Administration – Trump remains Trump and has a massive War Chest to fight the coming bitter Midterms.

Trump dominates the headlines but watch what’s happening in the bond markets. Yesterday Japan bond yields juddered a warning about political competency risks, but also how rising geopolitical and conflict risks are resetting investor expectations. When the bond market speaks, you ought to listen. Plus, Air Force One, Bitcoin and Howard Lutnick.

Venezuela bond prices have spiked higher on expectations of new investment, debt restructuring, and the monetisation of its oil resources. But how likely is it the nation can be reformed, attract new money, and satisfy the population while the old regime remains in place, and Washington demands to be paid?

 Markets are winding down for the holiday break, but the news flow continues to hint at rising destability and noise, hinting the future economic path will get more twisty and difficult. Lower rates and QE fuelled markets (but not growth) in the 2010s, but won’t work when there is a strong inflationary impulse in place!

This is not an obituary – but a story about markets. Hans-Jeorg Rudloff, who passed away earlier this week, was the dominant figure of the Eurobond market. His insights and vision were extraordinary – understanding how markets worked, how to dominate them, and setting the foundations for today’s $120 trillion global market!

Yet again I was wrong and overly bearish. Markets survived October with barely a shrug. Everything is apparently fine and dandy.. nothing to worry about? Complacency and belief abound. We have been here before…. And what does Rugby tell us about markets?