Yesterday, rumors were floated that the ECB would wind down ("taper") its €80 billion per month bond-buying stimulus. European bond yields backed up on the news (see chart below). As Hedgeye CEO Keith McCullough wrote in a note to subscribers earlier this morning:
"It wasn’t just a U.S. Dollar/U.S. Treasury ramp yesterday, it was another bounce (to lower-highs) in European Yields too on some ridiculous rumor that “the ECB is going to taper” – the ECB denied that, obviously, this morning but there are plenty of 2016 Bond Bears out there looking to get Fed. Winter is coming. And they’re starving…"
Bond Bears get fed if European growth accelerates. That ain't happening. (Note: One of our 3Q16 Macro themes is #EuropeImploding.)
Maybe the Bond Bears should go back into hibernation...