Bond Bulls Escape Through ‘Keyhole’ as Liquidity Dries Up
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Concerns that diminishing liquidity can cause gyrations in bond markets -- flagged by JPMorgan Chase & Co. chief Jamie Dimon -- came to a head this week.
As bonds tumbled across Europe, the bid-ask spread, a gauge of the market’s depth derived from the difference in prices or yields between buyers and sellers, widened. It reached 0.27 basis point for German 10-year bunds on Thursday, up from as low as 0.1 in March and an average of 0.2 this year, data compiled by Bloomberg show.