Pershing Fixed Income Market Commentary

It was a full risk-on assault this week, as the market took comfort in the twin concepts that a total European crisis can be averted and global growth has not been sacrificed. The events that drove this hope were a concerted effort by central banks to provide cheap U.S. dollars to financial institutions that are having trouble borrowing dollars themselves, and China’s move to ease lending standards—its first such move in 2 1/2 years. Although we question the timing and coincidence of these two Wednesday events, we perceive a more risk-tolerant market until proven otherwise. That moment may be soon coming, as E.U. leaders are expected to meet at the end of next week. The ECB, IMF and Germany comprise the new Troika and, literally, they are the last people standing. Read the full commentary now.