Tomorrow Will Be Either A Calm Day On The Bond Markets, Or Not (But Probably Will)

"Actually..." - Every bond trader you know
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While the rest of Wall Street rides something of a poll-and-news-cycle-based roller-coaster, settling into an uneasy calm today, bond traders have been pretty equanimous about things for a while. As they were before Brexit, bond market players are fairly certain that people aren’t going to go and do something really stupid today, like elect a guy who thinks bond payments are optional. But if they do, thanks to Brexit, they have a pretty good idea of what’s going to happen.

bloombergchart

"The election event risk is asymmetric,” said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets, a primary dealer. “Either a Trump victory will trigger a massive flight-to-quality move, or a Clinton win will result in a more modest bid for risk assets and status-quo expectations…."

"It will be a market event much like Brexit was," said Steven Ricchiuto, chief economist in New York at Mizuho. "Big money doesn’t want Donald. Big money wants Hillary Clinton."

Wall Street Bond Gurus Brace for Trump Shock, Expect Clinton Dud [Bloomberg]
Bond Traders Aren’t Worried About the Election; Should We Listen to Them? [WSJ]

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