This is the term used periodically to describe investors who push back against what are perceived to be irresponsible fiscal or monetary policies by selling government bonds, in the process pushing up yields, or implied borrowing costs.
Most of the focus on markets in the wake of Donald Trump’s imposition of tariffs on the rest of the world has, in the last week, been about the calamitous stock market reaction.
This was previously something that was assumed to have been taken seriously by Mr Trump.
During his first term in the White House, the president took the strength of US equities – in particular the S&P 500 – as being a barometer of the success, or otherwise, of his administration.
Image: Donald Trump in the Oval Office today. Pic: Reuters
He had, over the last week, brushed off the sour equity market reaction to his tariffs as being akin to “medicine” that had to be taken to rectify what he perceived as harmful trade imbalances around the world.
But, as ever, it is the bond markets that have forced Mr Trump to blink – and, make no mistake, blink is what he has done.
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To begin with, following the imposition of his tariffs – which were justified by some cockamamie mathematics and a spurious equation complete with Greek characters – bond prices rose as equities sold off.
That was not unusual: big sell-offs in equities, such as those seen in 1987 and in 2008, tend to be accompanied by rallies in bonds.
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What it’s like on the New York stock exchange floor
However, this week has seen something altogether different, with equities continuing to crater and US government bonds following suit.
At the beginning of the week yields on 10-year US Treasury bonds, traditionally seen as the safest of safe haven investments, were at 4.00%.
By early yesterday, they had risen to 4.51%, a huge jump by the standards of most investors. This is important.
The 10-year yield helps determine the interest rate on a whole clutch of financial products important to ordinary Americans, including mortgages, car loans and credit card borrowing.
By pushing up the yield on such a security, the bond investors were doing their stuff. It is not over-egging things to say that this was something akin to what Liz Truss and Kwasi Kwarteng experienced when the latter unveiled his mini-budget in October 2022.
And, as with the aftermath to that event, the violent reaction in bonds was caused by forced selling.
Now part of the selling appears to have been down to investors concluding, probably rightly, that Mr Trump’s tariffs would inject a big dose of inflation into the US economy – and inflation is the enemy of all bond investors.
Part of it appears to be due to the fact the US Treasury had on Tuesday suffered the weakest demand in nearly 18 months for $58bn worth of three-year bonds that it was trying to sell.
But in this particular case, the selling appears to have been primarily due to investors, chiefly hedge funds, unwinding what are known as ‘basis trades’ – in simple terms a strategy used to profit from the difference between a bond priced at, say, $100 and a futures contract for that same bond priced at, say, $105.
In ordinary circumstances, a hedge fund might buy the bond at $100 and sell the futures contract at $105 and make a profit when the two prices converge, in what is normally a relatively risk-free trade.
So risk-free, in fact, that hedge funds will ‘leverage’ – or borrow heavily – themselves to maximise potential returns.
The sudden and violent fall in US Treasuries this week reflected the fact that hedge funds were having to close those trades by selling Treasuries.
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Trump freezes tariffs at 10% – except China
Confronted by a potential hike in borrowing costs for millions of American homeowners, consumers and businesses, the White House has decided to rein back its tariffs, rightly so.
It was immediately rewarded by a spectacular rally in equity markets – the Nasdaq enjoyed its second-best-ever day, and its best since 2001, while the S&P 500 enjoyed its third-best session since World War Two – and by a rally in US Treasuries.
The influential Wall Street investment bank Goldman Sachs immediately trimmed its forecast of the probability of a US recession this year from 65% to 45%.
Of course, Mr Trump will not admit he has blinked, claiming last night some investors had got “a little bit yippy, a little bit afraid”.
And it is perfectly possible that markets face more volatile days ahead: the spectre of Mr Trump’s tariffs being reinstated 90 days from now still looms and a full-blown trade war between the US and China is now raging.
But Mr Trump has blinked. The bond vigilantes have brought him to heel. This president, who by his aggressive use of emergency executive powers had appeared to be more powerful than any of his predecessors, will never seem quite so powerful again.
“Priceless” jewellery has been stolen from the Louvre museum in Paris – as authorities revealed details of the daring raid that has forced the closure of the world famous landmark.
The museum, which is the world’s most popular, drawing up to 30,000 visitors a day, said on X it was closing for “exceptional reasons” on Sunday.
In a separate post, culture minister Rachida Dati said there had been a robbery and she was on site alongside museum and police teams.
Image: Police working by a basket lift used by thieves at the Louvre museum in Paris. Pic: AP
Image: The Louvre museum in Paris. File pic: AP
French interior minister Laurent Nunez said the “major robbery” involved intruders entering the museum via a basket lift using a platform mounted on a lorry.
“They broke a window and went towards several display cases where they stole jewellery,” he added.
“These are jewels that have genuine heritage value and are, in fact, priceless.”
Mr Nunez told France Inter radio the robbery lasted seven minutes, while the interior ministry said the criminals fled on two motorbikes. No injuries have been reported.
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The robbers were well-prepared, Mr Nunez said, and “had done scouting”, cutting window panes “with a disc cutter” before escaping “on a TMAX” (a type of Yamaha maxi-scooter).
The robbery took place between 9.30 and 9.40am (8.30-8.40am UK time), the French government said in a statement, adding an investigation has begun, forensic work was under way and “a detailed list of the stolen items is being compiled”.
Hooded criminals carrying “small chainsaws” entered the building from the River Seine side, where construction work is taking place, French daily newspaper, Le Parisien, said, quoting preliminary findings from the police investigation.
Image: A window believed to have been used in a robbery at the Louvre museum in Paris. Pic: Reuters
Image: Thieves used a basket lift mounted on a lorry to rob the Louvre. Pic: AP
Intruders went to the Galerie d’Apollon (Apollo Gallery), home to a selection of the French Crown Jewels, the ministry said.
The robbers escaped with nine pieces of jewellery from Napoleon and the Empress’s collection.
A necklace, a brooch, a tiara, were among the items taken from the Napoleon and French Sovereigns display cases. A third robber stayed outside, Le Parisien said.
One of the stolen gems was later found broken outside the museum, according to the paper, which said it was believed to be Empress Eugenie’s crown.
Police sealed off the museum and evacuated visitors. New arrivals were turned away and nearby streets were closed, according to the interior ministry.
Social media users posted pictures and videos from in and outside the building, with one people leaving in what the user described as “total panic”.
Image: Robbers broke in on the Seine side of the museum. Pic: Reuters
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On person on X said they were there and reported a confused-sounding scene of police “running near pyramid and trying to enter the Louvre from glass side doors but they were locked and they could not enter”.
“Everyone inside was running and banging on glass doors to get out, but could not open. Police and military police arrived,” they added.
It’s not the first time the museum, one of the world’s most famous and a French national landmark, has been targeted by thieves.
In 1911, the Mona Lisa vanished from its frame, stolen by a former worker who hid inside the museum and walked out with the painting under his coat.
It was recovered two years later in Florence – an episode that helped make Leonardo da Vinci’s portrait the world’s best-known artwork.
In 1983, two Renaissance-era pieces of armour were stolen and only recovered nearly four decades later.
The museum’s collection also bears the legacy of Napoleonic-era looting, containing 33,000 works of art, including antiquities, sculptures and paintings.
In addition to the Mona Lisa, its star attractions feature the Venus de Milo and the Winged Victory of Samothrace.
This breaking news story is being updated and more details will be published shortly.
Israel has received the bodies of two more hostages from the Red Cross, the Israeli prime minister’s office has confirmed.
Shortly after 10pm UK time on Saturday, Israel’s military said Hamas handed over “two coffins of deceased hostages”.
There has been no identification of the bodies yet.
The news came as tensions were beginning to rise over the closure of the Rafah border crossing between Gaza and Egypt.
Benjamin Netanyahu‘s office had said earlier on Saturday evening that it would stay closed “until further notice” – as the deadline for Hamas to return the bodies of the hostages had passed with no confirmation.
Mr Netanyahu had warned that its reopening would depend on how Hamas fulfilled its role in returning the remains of all 28 dead hostages.
The handover brings the count of returned bodies to 12 hostages, up from 10, according to Israel’s tally. Another 16 deceased hostages would then still have to be returned.
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All 28 were supposed to have been handed over by last Monday.
The handover of remains is among key points – along with aid deliveries into Gaza and the devastated territory’s future – in the ceasefire process meant to end two years of war.
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Rafah crossing to remain closed
Israel’s foreign ministry had originally said the Rafah crossing would likely reopen on Sunday – another step in the fragile ceasefire. This has now been revised to being closed “until further notice”.
A fully reopened crossing would make it easier for Gazans to seek medical treatment, travel internationally or visit family in Egypt, which is home to tens of thousands of Palestinians.
It is unclear who will operate the crossing’s heavily damaged Gaza side once the war ends.
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Meanwhile, Gaza’s ruins were being scoured for the dead, over a week into a ceasefire. Newly recovered bodies brought the Palestinian toll above 68,000, according to Gaza’s Health Ministry.
The ministry, part of the Hamas-run government, does not distinguish between civilians and combatants in its count. But the ministry maintains detailed casualty records that are seen as generally reliable by UN agencies and independent experts.
Famine declared
Israel has disputed them without providing its own toll.
Hamas-led militants killed around 1,200 people, mostly civilians, and abducted 251 people in the attack on southern Israel that sparked the war on October 7 2023.
Gaza’s more than two million people are hoping the ceasefire will bring relief from the humanitarian disaster caused by Israel’s offensive. Throughout the war, Israel restricted aid entry to Gaza – sometimes halting it altogether.
Famine was declared in Gaza City, and the UN says it has verified more than 400 people who died of malnutrition-related causes, including more than 100 children.
Officials in Israel say they have let in enough food, accusing Hamas of stealing much of it. The UN and other aid agencies deny this claim.
Volodymyr Zelenskyy has not ruled out the possibility that he can secure long-range Tomahawk missiles from the US, adding that he believes “Putin is afraid” of the consequences.
“It’s good that President Trump didn’t say ‘no’, but for today, didn’t say ‘yes’,” he said about the supply of the missiles, as part of a discussion which will air on Sunday.
He admitted the US president was concerned about a potential escalation with Russia, but Mr Zelenskyy told NBC, Sky News’s US partner, that the weapons are a genuine concern for Vladimir Putin.
“I think that Putin [is] afraid that United States will deliver us Tomahawks. And I think that he [is] really afraid that we will use them,” he said.
Image: Volodymyr Zelenskyy still hopes the US will supply Tomahawks. Pic: Meet the Press/NBC News
The weapons have a significantly longer range than any other missiles in Ukraine’s armoury and have the potential to be a game-changer in the war against Russia.
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While Mr Trump did not rule out providing the Tomahawk missiles, he appeared cool to the prospect as he looked ahead to a meeting with the Russian president in Hungary in the coming weeks.
‘US doesn’t want escalation’
Following the meeting with Mr Trump, who held a phone call with Mr Putin on Thursday, Mr Zelenskyy told reporters: “We spoke about long-range (missiles) of course. And I do not want to make statements about it.”
But he added: “We don’t speak about it because… United States doesn’t want this escalation”.
Image: Volodymyr Zelenskyy’s plans to secure new missiles had worried Russia. Pic: Reuters
Later in a post on X, Mr Zelenskyy said he was counting on President Trump to “bring this war closer to an end”.
“We discussed all key issues – our positions on the battlefield, long-range capabilities and air defence, and, of course, diplomatic prospects,” he said.
“Russia must end the aggression it started and continues to deliberately prolong. We count on the United States’ pressure.”
In a roundtable with journalists following the meeting, Mr Trump confirmed that hitting targets deep inside Russian territory would be an “escalation”.
Image: Donald Trump said hitting targets deep inside Russian territory would be an ‘escalation’. Pic: Reuters
He also said he was hesitant to tap into the US’ supply of Tomahawks, saying: “I have an obligation also to make sure that we’re completely stocked up as a country, because you never know what’s going to happen in war and peace.
“We’d much rather have them not need Tomahawks. We’d much rather have the war be over to be honest.”
Analysis: Is Trump being ‘played’ by Putin?
Before Donald Trump met with Volodymyr Zelenskyy, he hosted one of his favourite singers, Andrea Bocelli, in the Oval Office.
The Italian tenor serenaded him with the signature track Time To Say Goodbye, a song about hope and new beginnings.
But the next event on his agenda suggested antipathy between Trump and the Ukrainian president are firmly lodged in the past.
On the key issue of whether Vladimir Putin actually wants peace, the pair continue to fundamentally disagree.
Trump repeated several times his belief that Putin is committed to ending the war, which may come as a surprise to the people of eastern Ukraine, being pummeled by an expanded Russian offensive in the past few months.
Trump also spoke about “bad blood on both sides”, again inferring equal blame on Zelenskyy, whose sovereign nation was invaded, and Putin, who is doing the invading.
It’s in Putin’s gift to stop the fighting immediately, but that was glossed over.
Following Friday’s meeting at the White House, UK Prime Minister Sir Keir Starmer confirmed he had called Mr Zelenskyy to reiterate his support.
Ukraine has UK’s ‘resolute support’
A Downing Street spokesperson said: “The prime minister spoke to the president of Ukraine, European leaders and the NATO secretary general this evening following President Zelenskyy’s visit to the White House today.
“The leaders reiterated their unwavering commitment to Ukraine in the face of ongoing Russian aggression. A just and lasting peace for Ukraine was the only way to stop the killing for good, they agreed.
“Further discussions about how they could support Ukraine in the lead up to, and following, a ceasefire would continue this week, including in a Coalition of the Willing call on Friday, the leaders agreed.
“Following the call with world leaders this evening, the prime minister then spoke to President Zelenskyy bilaterally to underscore the United Kingdom’s resolute support for Ukraine.”