See also @LukeGromen’s commentary.Luke Gromen (@LukeGromen):Gold will be a bigger % of global FX rsvs than USTs in a few mthsCentral bank gold ($4.3T) will likely soon be > total USD assets in FX rsvs ($6.7T)Consensus only now shifting from "denial" to "anger" stage of grief on this...bargaining, depression, acceptance still to come https://t.co/i630iNUyLr ...

Summary of Key Points from the Conference Call Industry Overview - The discussion primarily revolves around the **US Treasury market**, **Canadian monetary policy**, and **European bond markets**. Core Insights and Arguments 1. **Federal Reserve's Policy Outlook**: Chair Powell's speech at Jackson Hole indicated a dovish stance, suggesting potential adjustments in policy based on economic data, particularly regarding labor market risks [2][4][10]. 2. **Market Reactions**: The market has shown a modest rally in response to the Fed's dovish signals, with current pricing reflecting about two rate cuts by year-end [4][10]. 3. **Foreign Demand for USTs**: There is a noted decline in foreign official demand for US Treasuries, with a net decrease of approximately $40 billion in holdings since late June, indicating a shift in buyer composition [4][5]. 4. **Canadian Monetary Policy**: The Bank of Canada (BoC) is expected to implement a 25 basis point cut in September, influenced by recent benign inflation data and labor market conditions [10][20]. 5. **European Bond Market Dynamics**: European yields have risen, driven by macroeconomic factors, with expectations that ECB policy will limit further easing [11][14]. 6. **Geopolitical Impact**: The potential for a ceasefire in the Russia-Ukraine conflict has ambiguous implications for European rates, with commodity prices not reflecting significant changes in energy supply [11][14]. 7. **Divergence in Nordic Economies**: The Riksbank and Norges Bank are taking different stances, with the Riksbank expected to cut rates while the Norges Bank maintains a steady policy due to stronger economic data [21][22]. Additional Important Insights 1. **Funding Risks**: The FOMC minutes acknowledged potential funding risks, particularly related to the Treasury General Account (TGA) rebuild, which could lead to increased volatility in money markets [9][10]. 2. **Investor Positioning**: There is a notable shift in investor positioning, with commercial banks increasing their UST holdings by approximately $60 billion since July, indicating strong domestic demand despite foreign pullback [4][5]. 3. **Curve Dynamics**: The UK rates are expected to steepen as the outlook improves, with inflation remaining a key concern for the Bank of England [21][22]. 4. **Foreign Inflows into European Debt**: Recent data shows a resurgence of foreign investment in European sovereign bonds, particularly in Southern Europe, indicating a shift from net divestment to strong sponsorship [14][17]. Conclusion The conference call highlighted a complex interplay of monetary policy, market dynamics, and geopolitical factors affecting the US, Canadian, and European bond markets. The insights provided a comprehensive view of current trends and expectations, emphasizing the importance of data-driven decisions in shaping future monetary policy.