Bond bull at the extremes

Via the excellent Damien Boey at Credit Suisse:

Over the past few weeks, the bond rally has taken us to uncharted territory. It is not so much that global bond yields are pushing record lows. It is not so much that a significant portion of investable government debt around the world is now offering negative yields. Rather, the key development is that so-called term risk premia across the world are at their most negative in recorded history. Recent market action has made a complete mockery of the very concept of term risk premia as either a speed limit indicator, or valuation tool for bonds.

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