From the desk of Steve Strazza @Sstrazza
Last week’s mystery chart was a popular one, so we inverted it to make things a bit more challenging. Someone still guessed it… Nice work.
It was the iShares 7-10 Year Treasury Bond ETF $IEF. The issue with inverting Bond charts is that when you do they look identical to yields. In the case of IEF, we’re basically dealing with the US 10-Year Yield $TNX.
Rising rates has been one of the main themes early this year as developed market yields have accelerated higher and hit the pockets of bond investors all over the world.
In this post, we’ll check in on some of the most important and most telling credit instruments on both absolute and relative terms in order to piece together the message the bond market is sending investors.
Read our post from last month for our take on what cross-asset ratios outside of the Bond Market are indicating. Many of these trends have confirmed their reversals and accelerated to the upside over the past month as investors continue to price in higher rates in the future.