How far can the bond rally get?

As usual, the accelerated COVID business cycle that we have dubbed the Amphetamine Cycle, is moving at a lightening pace. Previously, I’ve described the contest of market narratives as good news is good news, good news is bad news and bad news is good news.

Q1 was defined by good news is good news with rising yields and stocks plus a strong DXY.  Q2 has shifted to bad is good news with falling yields, rising yields and weakening DXY. What comes next?

Capital Economics has a crack:

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