The flight to safety even includes Italian sovereign debt now, as US housing market feels Fed tightening

Flight to liquidity reminiscent of January and February
As the equities market sells off, it's worth noting how much the sovereign bond market is rallying at the same time. I am seeing the 10-year US Treasury bond quoted at 3.079%, well down from a level just over 3.25%  at the beginning of October. And German 10-year bunds are trading at 35.3 basis points where they were at nearly 60 basis points early in the month.

What I find interesting though is that Italian 10-year yields actually dropped in European trading this morning, with bonds now trading at 3.444%, the lowest levels this week. It speaks to a flight to safety and liquidity due to the market selloff.

Yesterday, the market rallied. I asked "Does that mean the market rout is over?" My answer was no. And we can see why today. But...


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