Today may be the last day of full liquidity until next Tuesday, after the Easter holidays. We identify three developments that are characterizing the end of the month, quarter, and for some countries and companies, the fiscal year. Equity market sell-off, bond market rally, and the continued rise in LIBOR.  

The sell-off in stocks at the end of last week amid what we think was exaggerated fears of a trade was subsided and stocks rallied on Monday, but US stocks slumped yesterday, which is dragging global markets lower today. Last year's low volatility seems a distant memory. Since last month's swoon, the VIX has mostly held above 15 and below 25. It is near 23 now, which is a little more than twice last year's average.  

technology shares, which had led the global rally are in retreat.

In Japan and Europe, the only sector that is higher on the day are utilities, and that seems to be a function of lower bond yields. That is the second development characterizing the capital markets. The US 10-year yield fell through the recent floor around 2.80% yesterday and is now slipping below 2.75%. It is the lowest yield since February 6, when it briefly spiked to 2.65% amid the equity market meltdown. Australian and New Zealand's 10-year benchmark yields fell 6-7 bp, while the UK Gilt yield is five basis points lower at 1.37%, which is the lowest since January 24. Core yields in Europe are lower, while peripheral yields are a little firmer. The 10-year German bund yield is slipping below 50 bp for the first time since January 9.