Across different asset classes, issuers were this week able to bring large and tightly priced new bonds, breaking records along the way. It is a booming market everywhere you look, which is a problem if you look too hard.
It is not only highly rated senior bonds that are gaining traction. Capital instruments — typically considered as riskier investments for their subordinated nature — from corporates and financial institutions to multilateral development banks, were also hotly pursued by investors.
The widespread positivity is creating a convincing illusion that the many market-moving threats that have spiked volatility in recent months — enlarged government spending on either side of the Atlantic, sluggish growth globally, geopolitical clashes in many regions, and an on-the-brink trade war and two actual wars, to name just a few — have barely left a mark and are no longer of concern to markets.
It feels like it needs to be said clearly — these problems are still very much lingering in the shadows and could upend markets at any given moment.
Many fundamental concerns have not subsided, nor have the significant uncertainties clouding politics and markets.
Some have put the exuberance down to issuers and investors making up lost time over the last couple of months to catch up with their funding, or improve their P&Ls before the half-year point.
Others reckon that markets, like with everything, have just grown used to the many uncertainties and it only makes sense to stop focusing on too many variables and speculating on the unspeculatable.
In reality, it is probably a murky mix of both.
But one thing is clear — the unpredictable nature of the many underlying risks facing markets means that the risk-on sentiment may well be short-lived. But until the inflection point comes, the party is set to continue. Live in the moment, because it won't last forever.