| The Fed continues to see elevated uncertainty. Beijing plans rule changes to block Chinese companies from listing overseas. A paper concludes an animal contagion is the likely pandemic genesis. Haiti plunges into chaos after its president was assassinated. Here's what you need to know. Federal Reserve officials were not ready to communicate a timeline for scaling back asset purchases due to high uncertainty on the economic outlook, though they did want to nail down a plan in case they have to move sooner. Minutes released Wednesday of their June 15-16 Federal Open Market Committee meeting revealed lingering questions about how long labor shortages and supply bottlenecks contributing to inflation would last. Meanwhile, central banks have become the market's biggest whales, having spent $9 trillion since the start of the pandemic. Asian stocks are set for a steady open after the S&P 500 and Nasdaq Composite each closed at all-time highs. Apple shares also rally to a record close on a strong iPhone outlook. The dollar edged higher against a basket of major currencies while oil fell as investors await further signals on production after a breakdown of OPEC+ talks. Regulators in Beijing are planning rule changes that would allow them to block Chinese companies from listing overseas, even if the unit selling shares is incorporated outside China. This closes a loophole long used by tech giants from Alibaba to Tencent to attract foreign capital. Once amended, the rules would require firms structured using the so-called Variable Interest Entity model to seek approval before going public in Hong Kong or the U.S. Separately, Didi, its directors and underwriters were hit with two U.S. shareholder suits after China's crackdown. Malaysia's biggest political party has withdrawn support for the country's ruling coalition, calling on Prime Minister Muhyiddin Yassin to step down and allow a temporary leader to take over until fresh elections can be held. The move in the early hours of Thursday tops a turbulent 15 months that began with the surprise resignation of longtime leader Mahathir Mohamad in February last year. Early Covid cases traced to markets in Wuhan mirror the initial spread of SARS 17 years earlier, more than 20 scientists said in a paper that concludes that an animal contagion is the most likely explanation for the pandemic's genesis. The epidemiological history of SARS-CoV-2 is comparable with previous animal market-associated outbreaks of coronaviruses and offers a simple route for human exposure, according to their review of scientific evidence pertaining to the pandemic's origins. What We've Been ReadingThis is what's caught our eye over the past 24 hours: And finally, here's what Tracy's interested in todayThe persistent move lower in U.S. Treasury yields means I've just seen the first analyst reference to the Greenspan conundrum of old. As a reminder, this conundrum refers to a situation back in 2005 when then-Federal Reserve Chair Alan Greenspan was flummoxed by the failure of Treasury yields to rise despite an increase in benchmark interest rates. Clearly the situation today is different as the Fed isn't raising rates anytime soon, but the contradiction between stubbornly low bond yields — the benchmark 10-year briefly dipped below 1.3% on Wednesday — and the still relatively strong U.S. economic recovery is clearly puzzling market participants.  So what's going on? Just like the Greenspan conundrum, there are a whole bunch of theories being proffered up to explain the disconnect ranging from the more technical to the fundamental. Here are a few I've taken note of: - Occam's Razor: Bond markets really do see slower growth and view recent inflationary pressures as transitory.
- Markets aren't buying into the Fed's hawkish pivot from last month and are predicting a glacial pace of tapering.
- Crowded positioning has created a short squeeze. JPMorgan's most recent survey of clients shows that "some short covering has occurred, but the breadth of bearish duration positions remains on par with 2017-2018," suggesting there's further to go.
- Banks and other big investors like pension funds are buying U.S. Treasuries to satisfy liquidity requirements or with new money from the Rescue Act, effectively putting a cap on yields.
Perhaps the most Greenspan conundrum-esque explanation comes courtesy of Deutsche Bank's George Saravelos, who argues that the economy is moving from its sharp V-shaped recovery to more sedate rates of change with the impetus for growth being handed off from temporary fiscal stimulus to a private sector that might still be nervous about spending: "The big structural question going forward is how much will the private-sector be willing to spend in the post-COVID steady state?" It's not quite the Asian savings glut of the early 2000s, but it's close to it. You can follow Tracy Alloway on Twitter at @tracyalloway. | 
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