ZH: June 18, 2016
This Is What The Coming Bond Shock Will Look Like
"global government bonds are annualizing 23% YTD total returns, the highest in 30 years (see below). And currently, $9.7tn of global bonds are yielding < 0%"
But will it continue?
At any time now, these lucky investors seeking "safety" of an asset class that has gained 23% in six months will do what is known as "take profit". And when profit taking begins en masse, then the unwind will be swift and brutal.
German 10 year deja vu of this time last year:
Price Percent oscillator lower pane
"here is what the upcoming bond shock would look like, as well as how to trade it: stocks down, banks down a lot, consumer staples/healthcare outperforms, small outperforms large, FX reaction...Developed Market currency appreciates...
Emerging Market currency collapses"
Really what could go wrong?