Not a lot to go through yesterday with major markets in a holding pattern against recent highs. US bear-steepened initially in response to the post-CPI hangover and into the $22bln 30yr treasury reopening. Furthermore, early signs of reflation trades are entering back to markets with Copper breaking out of its 2yr downtrade and US inflation swaps also grinding back to 3 month highs. With the Fed likely to remain on an easing basis despite stubborn inflation, focus will likely return to long-end yields in the near-term, especially a still unknown reaction on how the market might behave into the scrapping of YCC from the BoJ next week.

With Japan labour unions scoring record wage gains and the BoJ finally looking to exit from its negative rate policy, could China also be seeing an end to its recent disinflation pressures with the Shanghai Composite now positive for the year (+3%), and China 30yr bonds seeing the biggest sell off (prices lower, yields higher) since 2021, are we due for a synchronized reflation theme globally just as Central Banks have entrenches themselves in their easing biases?

As nothing changes sentiment like price, Microstrategy was able to announce its 2nd convertible issuance with March alone as it raises another $500mm in fiat capital to purchase more Bitcoins. The company has already purchased more than $1bln in Bitcoin in the first quarter of 2024, thanks in large to the proceeds from the sale of the early convertibles which netted over $800mm. The stock has already broken its 2021 highs and is about half way to its dot-com bubble highs from 1999. Will history repeat itself again as the crypto rally continues unabated? We certainly live in interesting times indeed…

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