You spend ages waiting for a good short theme to come along, and two turn up at the same time. I really think markets are not fully appreciating the significance of the sell off in German bunds, and the likely continued weakness in the bunds.
We have also quietly seen 30 year JGBs sell off to reach new cycle highs.
What is unusual about these moves is that it has occurred in a period of US stock market weakness. In the “free market” era from 1980 to 2016, I would expect JGB yields to fall in periods US stock market weakness - but not anymore. Why? Because Donald Trump has gotten his wish. No one will ever trust America to protect a democracy again and everyone is remilitarising. I suspect this is going to be disastrous for the US - and hence time to add more shorts.
