- New Science in old markets -

Bonds and Bunds extend

Both US bond and German bund futures made top extensions on Friday, at a daily scale. This latest sign that the long-standing tendency for prices to rise/yields to fall in these important government bond markets is another chance to sell short. Of the two, we prefer the US as a candidate, for some obvious reasons - QE has ended in the US which removes an important support while it has yet to start in Europe, so providing a possible extra boost to bunds if it ever does begin. Bunds have also benefitted from being the main 'flight asset' for investors fleeing Europe's continued financial swamp and this status will probably continue. Nonetheless, both are likely to stall hereabouts so the risks of selling either are greatly reduced right now:

bunds and bonds