Tips & Ideas 

Bond bloodbath?

May’s Coppock signals once again demonstrated indecision and a general lack of commitment towards equity markets around the world, with a number of recent sell and unofficial buy signals quickly reversed - an increasingly familiar pattern as markets flirt with record highs and get to grips with the diverging monetary policies of the world’s largest economies. But the ramifications of that monetary tug-of-war are being felt most keenly in gilt markets, and that’s reflected by Coppock this month. J-Bonds, Treasuries and Bunds all flashed sell in May as the long-standing bull run came to an abrupt halt. Coppock’s buy signals on gilts have proved well timed previously – unlike sell signals on equity markets. Alongside the quick reversal on the liquid corporate bond index we follow, that track record suggests the sell indicator on gilts may too prove a blip rather than a clear indication that the bond bubble has finally burst.

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