What to make of the (slightly) mixed messages in markets

In recent weeks, it has often looked as though equity markets aren’t quite on the same page as bond and currency markets. Indeed, despite its fall today, the S&P 500 remains within touching distance of the all-time high it reached only last week. And while the index is down by around 1.5% today (as of 16:30 GMT), that pales in comparison to the plunge in government bond yields: the US 10-year Treasury yield is down ~10bp, one of the largest single day falls in recent years. Indeed, since early June, it has fallen by ~40bp and is now at its lowest level since early February. Meanwhile, in currency markets the US dollar has strengthened across the board, and safe havens have generally outperformed riskier currencies.