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The stock rally since March

 is built on the premise that the lockdown is one-and-done, and that a V-shaped recovery in GDP is more or less assured.

US Treasury will be issuing $100bn of monthly debt over and above Fed purchases from now on, and appetite for this flood of bonds from banks, pension funds, and foreign investors is “lukewarm” .

The Fed and the ECB will not dare until they have crystal clear justification. It will take a very painful sell-off before we reach that threshold. 

As we now know from an astonishing speech this week by the Bank of England’s Sir Jon Cunliffe, is that the market ructions in late March came close to bringing down the global financial system (yet again). 

Ambrose Evans-Pritchard Telegraph 12 June 2020

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