There seems to be a competition between U.K. fiscal and monetary authorities as to which can cause the most turmoil in financial markets, in light of Bank of England Gov. Andrew Bailey telling a conference in Washington D.C. that pension funds had three days to sell U.K. government bonds.
One place to look: Japan, where the yen USDJPY, +0.50% has declined in value by 27% against the dollar this year while the Bank of Japan keeps rates at zero. “One thing that could break, and it’s something we discussed internally, is the ability of the Japanese to maintain a zero interest rate policy,” he told MarketWatch in an interview.
Ricciardi is the lead manager of the Deuterium Global Dynamic Allocation Fund, where investments are primarily dictated by its model of the global economy, with inputs for central bank policy, market valuation and price trends. Ricciardi notes that this year, bonds sold off first, then non U.S. currencies, before stocks starting swooning. He said it’ll probably reverse in that order as well, when either the Federal Reserve will pivot or the labor market will turn — but that won’t be until next year.
The buzz The U.S. economics calendar includes producer price data, and the release of the Federal Open Market Committee minutes. Bank of England chief economist Huw Pill is due to speak at 7:35 a.m. Eastern. Coal producer Peabody Energy BTU, -2.62% is in talks with merge with Coronado Global Resources CRN, +8.01%.