There might be a hint of that in Asian markets today given the Nikkei is flat even though the S&P 500 shed 2.4% on Monday. Usually it would be down 1,000 points. And that's despite a stronger yen.
After all, the money fleeing U.S. assets has to go somewhere, and not just to European defence stocks. Thus, according to LSEG Lipper data, investors bought a net $11 billion in European equity funds and $3.6 billion in Asian equity funds in the week to April 16, while U.S. equity funds saw an outflow of $10.6 billion.
Since then, President Trump has upped the stakes by attacking Fed Chair Powell for not cutting rates as speedily as Trump would like. It's not clear if he has the power to fire the Chair, but just the appearance of threatening the independence of the central bank is another body blow for investor confidence in the full faith and trust of the United States.
That saw the dollar hit another decade low on the Swissy at 0.8842, bringing losses since "tariff day" - calling them reciprocal is an insult to the English language - to more than 8%. The euro has popped above $1.1500 and the dollar is testing the 140.00 yen bulwark. Foreign investors in the U.S. who were unhedged have had a particularly painful April.
Yields on 10-year Treasuries climbed to 4.41%, extending the recent jump in term risk. If Trump would consider forcing Powell out and appointing a loyalist, then the idea of, say, replacing Treasuries with zero coupon perpetual bonds might not seem so unthinkable.
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