Share on twitter by Patrick Commins The evidence of the past few weeks challenges the idea that the end of the 30-year bull market for bonds spells imminent disaster for stocks.That was very much the signal markets seemed to be sending in February, when a rogue US wages figure sent bond yields shooting higher and convulsed markets around the world.Fears of an inflationary outbreak in the world’s largest economy laid waste to the low-volatility trade and smashed stock prices as investors leavened their unbridled optimism with a healthy dash of reality. US stocks dropped 9 per cent in short order; the ASX by 5 per cent.If investors are worried about the sharp bond market sell-off since early April, they have a funny way of showing it. The US 10-year Treasury yield, the global bond benchmark, last week hit a seven-year high of 3.13 per cent. Treasuries have managed to rally a touch since then (remembering that prices move in the opposite direction to the yield) but are still over 3 per cent and up 0.33 percentage points over the past seven weeks. That’s a heart-stopping move in the traditionally staid world of fixed income, and about twice February’s move. Advertisement… Read full this story
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