All eyes on US data and the Fed

IT wasn't that long ago that analysts spoke of the "Great Flotation" giving way to the "Great Rotation". The former was a reference to the strategy adopted by the US Fed and other central banks to pump liquidity into the system to float risk assets and the economy; the latter was a reference to a gradual shift of money out of bonds into equities.

Over the past fortnight that talk has been shelved; money hasn't flowed from bonds into stocks, instead, it's going the other way - last week, the 10-year Treasury yield fell to a 16-month low of about 2.33 per cent.

The assumption behind the original theme, of course, was that the Great Flotation would actually work as intended and that the affected economies - mainly the US - would recover and eventually achieve the necessary "escape velocity" to float upwards on their own, without liquidity support.