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.
Like this:
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?
Chinese Yuan
Global Financials
