CatalystsMy Comment: The global economy is on fragile footing and all that's need is a catalyst to topple the dominoes. Here are 3 near term catalysts to watch:
1) US presidential debate on 6/27. If Biden has one of his senile lapses, he's toast.
2) French elections on 6/30 and 7/7. If Le Pen has a major win, it could destablize the French bond market
3) Major Japanese bank failure to trigger liquidation of US Treasuries.
The Music Just Stopped: Japan Banking Giant Norinchukin To Liquidate $63 Billion In Treasuries & European Bonds To Plug Massive Unrealized Losses | ZeroHedge
Excerpts:
And yes, the Japanese rates canary is quite, quite massive: as of the end of March, Norinchukin had approximately 23 trillion yen of foreign bonds (about $150 billion), amounting to 42% of its total 56 trillion yen of assets under management. To get some sense of the scale, according to the Bank of Japan, outstanding foreign bonds held by depositary financial institutions amounted to 117 trillion yen as of the end of March. Norinchukin, which is a major institutional investor in Japan, holds as much as 20% of the total on its own! And those asking, yes: once Nochu begins selling, all others will have to join the club! And it's not just banks: if and when the selling begins by a bank that holds 20% of all foreign bonds in Japan, the liquidation cascade will quickly spread to Mrs Watanabe. According to the U.S. Treasury Department, Japanese investors held $1.18 trillion of U.S. government bonds as of March, the largest slice among foreign holders.
Needless to say, but the Nikkei does so anyway, "Massive sales by Norinchukin could have a sizable effect on the U.S. bond market."