February 2016 – ADIFO Global Market Review
Market Recap — Less Than Zero
“I don’t know karate, but I know KA-RAZY!!!” – James Brown, The Big Payback
“In theory there is no difference between theory and practice. In practice there is.” – Yogi Berra
Last month we reported that the BOJ surprised markets by adopting negative interest rates at the end of January for the very first time, a year and a half after the ECB became the first major central bank to venture into the abyss (granted, smaller economies such as Sweden, Denmark and Switzerland had already blazed a trail into that great unknown). Not to be outdone, the ECB cut rates again on March 10th, charging banks 0.4% to hold their cash overnight. By February, more than $7 trillion of government bonds worldwide offered yields below zero.