The focus on the US election is currently masking another, and potentially much more important, story: the meltdown in sovereign bond markets.

A minor “hiccup” from Rachel Reeves led to a complete frenzy in Gilt markets on Wednesday, the softest NFP report in years triggered another bond market sell-off, and German Bunds are trading at all-time weak levels versus swap rates. Something is going on, as markets are avoiding sovereign bond risk at all costs.

Is this the moment we’ve all been waiting for? Has liquidity dried up enough for G3 central banks to consider acting in unison? We’re certainly getting close, and this may be the single most important story for your portfolio in the coming quarters.

Microstrategy, gold, and similar assets seem to have already picked up on something.

Chart 1: Bunds trade all-time-weak versus swaps due to tight liquidity in EURs