May 13 - A great rotation out of core debt? It’s more a QE-driven great flotation that is lifting all boats, says Rabobank Strategist Richard McGuire.
It's not in debt cost tumble again at an ocean at three a desperate we just swinging from irrational pessimism. To rational exuberance well joining me now to talk about this is from a bank -- you know I think thing comes matches which went live original seeing a swing from cool to. -- -- I yes I think it's pardon possibility of an ongoing move since that's right -- -- here. Promised to do whatever it takes and unveiled the ONT programs and some. Beasts of the funds that flowed out of the periphery practical Europe has now returned. To the periphery. -- seeing what we return was -- re Euro as they should Neitzel -- complete fragmentation of the -- almost complete fragmentation of the eurozone. -- bull market last year that process is now in. In the midst of -- of a reversal was still possibly some way to go but we have seen these -- returning. And you think did best isn't getting ahead of themselves because it wasn't such a long time ago when he sold. And two year at that time and O'Neill's at seven point 5% I think it was in 2011. I guess I think fundamentally it's hard to justify this rally in the narrowing of spreads that we have. Seen in the periphery. Certainly had deficits continue to surprise to the upside that something this area and irritable as regards Spain. We were in the midst of a political paralysis in its media outlook politically for Italy has improved that remains. The very least uncertain and groceries now certainly softening and it says the cool. Countries are within Europe we catapults to Cypriot bailout we've seen signs of systemic risk in Slovenia. Against the yen the rally at the periphery continues brits continue to generic response cost of of a grand does seem really I think it which is against a backdrop of Central -- largest. A globally all Aussie crosses are performing with that peripheral bonds school bonds. High yield bonds or withers commodities or equities which are forging new. Record highs all but it's surprising in this type of liquidity we don't think that we -- seeing a great rotation as some school some have called full. In terms of investors switching out of balls into stocks -- rather great flotation when Orson policies are performing illegal but -- surprising. Now I knew rich should -- that you don't like any peripheral debt but if you have to make an educated choice. Which once would you go for it -- Spain Portugal. Yes was probably necessary don't like we trade rather cautiously we do actually have treating the -- strategy site within rabobank. -- we are trading a pro liquidity a source who were posted could see sort of where real long six year -- emphasis from its. But it serves all the preferably -- this spread narrowing -- and so Spain and Italy. But against this backdrop of a market confidence of fits our institutions -- systemic risk. Both schools certainly does look to offer. Some considerable appeal given the -- to -- that a country of holds a given the successful first step towards a return to the market which conducted the concluded. Last week might be activated and my thanks to -- -- to rob a bank in cool britney's. -- -- -- and -- in an -- as it steps up his bid to remain independent. Irish drugmaker is paying USPS about bombs one billion dollars that 21%. As well -- on best treat drugs. The news comes up and not rejected a five point seven billion dollars takeover bid from royalty Obama. And that's all from us and they did join waited every day at this time to take the pulse of the market I'm managing all. This is what is.