Government bond prices in the US, UK, France, Sweden, and Denmark fell today, with 10 Year T-Note yields jumping by 5.44%. According to the WSJ, investors are less likely to accept low returns because of confidence caused by the possibility of Japanese stimulus and the knowledge that Theresa May will be Britain’s next PM.
The Dow joined the S&P in setting a new record, up 0.66% to 18347.67. One contributing causative factor the WSJ points out is “share buybacks,” in which companies buy back their own shares from investors to boost both shareholder confidence and stock price. Total buybacks for this year so far total $357 billion according to Birinyi Associates.
The British pound has not significantly recovered against the dollar with GBP/USD at 1.314 today , and is not expected to do so, according to the CFTC. This is because money managers are still holding mainly short positions, and this behavioural finance suggests that the pound will fall.