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Bonds and Stocks are diverging – It can’t last
It is an interesting time in markets at the moment with the spike in volatility and the bounce in stocks – particularly the S&P 500 futures – off the 2011 trendline. But while stocks have bounced bonds, although off their lows, are signalling that something remains amiss in global markets. This is xtremely important in judging if the markets are back to their risk-seeking best, are the moves in bond markets. Indeed, the fact that US 10-year Treasuries are down 2 points to 2.19%, German Bunds closed at 0.81%, and Gilts rallied 5 points down to 2.15%, suggests a disconnect between these two big asset markets. ... (full story)