What This Wild Month In Markets Has Exposed
Market Depth
The Worst Trading Conditions in the Government Bond Markets
The biggest swings and the most volatility occur in order of most intrusive central banks to least, right? So B.O.J. and JGB is being the worst trading conditions, followed by the European sovereigns as the ECB began their balance sheet tapering in this month of March. And that's what happens when non economic actors with unlimited printing presses like enter the government bond markets as the largest whales. You have actual activity and liquidity just sap up and disappear. The market makers disappear, bid-ask spreads just blast wide open, and there just isn't any normal functioning anymore.
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