Global View April 2015: Is this Really a Bond Bubble?

by Michael J. Howell13. May 2015 15:41

Bonds may be richly priced based on their risk (or term) premia, but we can find no evidence of a G4 bond bubble despite obvious investor concerns raised by negative interest rates for many issues. This does not say that bond prices will not fall, nor yields rise over coming months. Indeed, we are expressly negative on the US Treasury and Bund markets for liquidity-based reasons. However, there is no bubble in the normal sense. The only major anomaly we can spot based on G4 risk premia is the remarkable lack of disparity, despite obvious monetary policy differences.


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