Investors spent May working out what tighter US monetary policy would mean for the world. Yesterday they were frantically trying to remember what happens if the US Federal Reserve keeps buying bonds.

US 10-year Treasury yields dropped almost 10bp in the minutes after disappointing ISM manufacturing data showed the sector shrinking at its fastest since June 2009. The dollar fell and has now unwound most of its gains since the talk of Fed exit began in early May (expect the strong yen to mean more pain for Japanese shares). Meanwhile, US shareholders could not make up their minds if bad news on the economy is good or bad news for stocks.

For the past few weeks, signs of a stronger economy have been bad for investors, raising the odds of the Federal Reserve “tapering” bond purchases. So one might think bad news on the economy would mean a return to how things were, with higher bonds and equities.