Macro Blowups Everywhere - What Now?

Global bond markets face significant volatility as French government bonds widen to 150 basis points over German Bunds, mirroring 2012 crisis levels. This instability, compounded by negative convexity in mortgage-backed securities and the unwinding of levered carry trades, creates a challenging environment for short-term traders. Despite rising yields and tightening financial conditions, US equity markets remain resilient, supported by strong nominal growth and robust corporate earnings. The current landscape is characterized by a "good news, bad price action" dynamic, where potential fiscal restraint from French political figures fails to compress spreads. Investors face a high bar for shorting bonds due to elevated carry-to-volatility ratios, while the US dollar maintains strength against the Euro, though it appears increasingly overextended against other currencies like the Mexican Peso.