From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley
Treasury Bonds have collapsed in recent months as interest rates have rallied to their highest levels in years.
And it’s not just treasuries, the trend is lower for corporate bonds as well.
While fixed income markets have experienced steady selling pressure since 2021, downside volatility has accelerated in recent months. Following the worst Q1 returns in decades, bonds have continued to plunge to kick off the 2nd quarter.
The best way for us to take advantage of this is to keep finding clean setups to short.
Today, we will outline a couple of shorts in high-yield debt and discuss what a sustained downtrend for these bonds could mean for the broader market.