ChartBrief #16 Breadth in Bonds

The first point to note is that the analysis uses bond yields, and since bond yields move inversely to bond prices we are thus looking at bond yields upside down.  By this I mean for 50dma breadth instead of % proportion of bond yields trading *above* their 50 day moving average, it will be % of bond yields trading **below** their 50 day moving average.  Therefore when these indicators are running close to 100% it means broad strength in the bond market, and when they track close to 0% it means global bond markets are selling off and yields are heading higher.
The best way to illustrate it is to look at the chart where the “taper tantrum” and “bund tantrum” labels are.  Both of these episodes were major and broad-based global bond market crashes.  The taper tantrum was triggered by the Fed hinting at tapering its QE program, while the bund tantrum was a logical conclusion of bonds getting over-stretched out of line with fundamentals (arguably that one was also triggered by an infamousBill Gross tweet).
Bottom line:Global sovereign bond breadth presents an interesting view into global bonds, the recent bond market tremor was nothing compared to the bund and taper tantrums, but it could be a shot across the bows.

[drizzle][/drizzle]

Vanguard’s move into PE may change the landscape forever

Private equity has been growing in popularity in recent years as more and more big-name funds and institutional investors dive in. Now even indexing giant Vanguard is out to take a piece of the PE pie. During a panel at the Morningstar Investment Conference this year, Fran Kinniry of Vanguard, John Rekenthaler of Morningstar and Read More


Previous articleThe End of the Commodities Crash?
Next articleChartBrief #18 Japanese Business Failures
Topdown Charts: "chart driven macro insights" Based in Queenstown, New Zealand, Topdown Charts brings you independent research and analysis on global macro themes and trends. Topdown Charts covers multiple economies, markets, and asset classes with a distinct chart-driven focus. We are not bound by technical or fundamental dogma, and instead look to leverage any relevant factor to capture the theme. As such, here you will find some posts that are purely technical strategy, some that just cover economics and data, and some posts that use multiple inputs to tell the story and identify the opportunities. Callum Thomas Head of Research Callum is the founder of Topdown Charts. He previously worked in investment strategy and asset allocation at AMP Capital in the Multi-Asset division. Callum has a passion for global macro investing and has developed strong research and analytical expertise across economies and asset classes. Callum's approach is to utilise a blend of factors to inform the macro view.