Note – Bloomberg: And finally, here’s what they’re interested in this morning

And finally, here’s what Kana’s interested in this morning

It was deja vu for currency traders Monday. With Japanese financial markets shut for a holiday, thin liquidity led to the same sort of “flash crash” we saw in early January with the yen. Albeit on a smaller scale, the Swiss franc slumped nearly 1 percent in a matter of minutes before quickly reversing to trade stronger on the day, in a range that was almost double this year’s average. If this is going to be the standard pattern, investors better buckle up because the next extended Tokyo holiday will be a very long one. A Golden Week break, starting from late April, will shut markets for 10 straight days (counting weekends). That’s longer than theLunar New Year that just ended for Chinese markets. While some currency traders in Japan may work over the holidays, hedge funds may take advantage of thinner-than-usual liquidity, driving up volatility — especially in the yen.

Worries aren’t exclusive to the currency market. Investors will probably be wary of carrying big open positions in Japanese stocks going into Golden Week — all the more so if they’re going to face a potentially stronger yen. The prospects of Sino-American trade talks seem to flip on a weekly basis, shifting flows in and out of risky assets. China, where an economic slowdown has cut profits at Japanese firms, will also release manufacturing data over the period. It all warrants preparing for a little volatility this spring.

And finally, here’s what Sid’s interested in this morning

Smart investors are doubling down on bets a global synchronized slowdown has yet to be priced in. Bund yields fell below 0.1 percent this morning as inflation expectations tumble and growth momentum eases. Longer-duration bonds are getting an incredible bid right now, all at the expense of equities. And the amount of negative-yielding global debt has jumped to over $9 trillion. As ever, these market signposts serve as a Rorschach test for bulls and bears. The belief that fragile economies will keep central bankers in dovish straight-jackets sounds like an unambiguous killjoy for the new-year stock rally. On the other hand, lowflation with still-continued growth on the heels of depressed valuations and pent-up flows looks like the famous Goldilocks scenario for equities. No wonder narratives on Wall Street seem to go from doom to boom by the day. Perhaps there’s only one conclusive thing to say: German yields keep on falling despite the ECB’s drive to end quantitative easing — effectively the mirror image of the days when Fed purchases spurred higher Treasury yields. That underscores how policy signals and macro bets matter more for the bond market than what central banks might actually be doing.