US bond bulls stampede over markets

Wednesday, 8 October 2014

As I’ve argued many times, the US bond bull market that many expect to die is the new incarnation of the Japanese “widow-maker” trade. Last night, as the equity market correction continued, the bond bull market broke out again, despite the rising impression of looming interest rate rises in the US. Yields at the long end of the curve dropped to 3.05% and are now at a new low in their taper trantrum retracement:

On the long term chart the bull market continues to gallop:

How low then? From Scotiabank’s Guy Haselmann:

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.