Now that the G20 has come and gone with few ripples (other than in the streets of Toronto), the market is turning its attention back to the wobbly state of the global economy and the prospects for slow growth ahead as governments try and consolidated bloated budgets.
Interest rates are falling in the US and Europe with the benchmark 10-year note yield equaling its lows for the year at 3.06%. European spreads are edging wider again with Spain back to nearly 200 bp over Germany. Oil is giving back some of Friday’s hurricane-induced gains as well.
The dollar tends to outperform in these environs, as has been the case so far today. Poor US data later this week would only accelerate the trend.