The ‘Ultimate Contrarian Trade’ Makes New Friends

The video discusses the performance of European markets, highlighting the role of central banks in shaping market dynamics. It explores the impact of central bank policies on risk assets and fixed income, emphasizing the shift towards easier monetary policies. The discussion also covers the supply-demand dynamics in fixed income markets and the implications of trade relations on European bonds.

What was the initial expectation for central banks going into 2018?

• To lead a move towards higher interest rates

• To focus on quantitative easing

• To maintain current interest rates

• To lower interest rates

How did the Fed's actions influence the market's view on risk assets?

• Led to a decrease in stock prices

• Increased fear of economic downturn

• Caused a shift to cash holdings

• Provided support for risk assets

What is a significant factor in the demand for fixed income according to the discussion?

• Decreasing commodity prices

• Rising stock market

• Dovish central bank policies

• High inflation rates

Why might European investors hold German bonds in their portfolios?

• For tax benefits

• Due to high liquidity

• As a safe asset

• For high returns

What could potentially drive a backup in bond yields according to the discussion?

• Rise in unemployment

• Increase in inflation

• Resolution of trade disputes

• Decrease in central bank rates