Global Daily: Resetting expectations

Yesterday saw the Nikkei -2.2%, the Dax -1.7%, the S&P -2.7%, and the Nasdaq –3.8%, while the US Treasury 10-year yield the White House is now focused on was -5bp to 4.16%. As the headlines put it, markets were “swooning”, first on China drifting back to deflation, then on President Trump’s comments that refused to rule out a US recession. Frankly, that commentary managed to be both very shallow and deeply myopic at the same time.