If I had to summarize this past week in the $100 trillion global bond market, it’d be fairly straightforward: Traders are enormously fearful of what the coronavirus outbreak will mean for the world economy and adjusting their positions accordingly.
Yet somehow, that feels like a vast understatement. From U.S. Treasuries to leveraged loans, and municipal debt to Austria’s century bond, the last several trading sessions have resulted in a blizzard of headlines proclaiming broken records and the wildest market swings in years. It’s anyone’s guess whether such extremes can continue. That’s because so much is uncertain when it comes to the coronavirus, its potential spread, and what monetary and fiscal authorities will need do to mitigate the economic fallout.
