Was today’s drop in bond yields the circuit breaker we’ve been waiting for?

The headline to this post is an immediate question that popped up when I read this from a Barclays note:

  • “Surging real rates and a stronger dollar are unfriendly to risk
    assets. Absent a circuit breaker to the bond market, equities may
    continue to struggle, as rising x-asset volatility prompts more
    de-risking and cash is the only place to hide.”

Lower yields, and lower oil, added to positive sentiment that gave a boost to ‘risk’ in Wednesday trade. But, yeah, is this the circuit breaker a pause for the bears to regroup?


  • “The growth-policy
    trade-off is tricky, as policy transmission works with a lag, so
    central banks are unlikely to blink in a hurry, unless something
    breaks. Meanwhile, markets are starting to pay attention to fiscal
    risks, which means pressure on sovereign yields may be here to stay”

Daily candles below, is that final one (Wednesday’s) enough to signal a top is in? Let me know in the comments. Any other bond comments, technical analysis or otherwise, welcome also!

This article was written by Eamonn Sheridan at www.forexlive.com. Source