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  • Writer's pictureEdward Ballsdon

Bond pricing like 2007….really?

Published 6 Nov 2023


  • Following the 17month bond bear market, this report shows that the market pricing is very different to what was seen after the 2016-2018 bond bear market.

  • In fact, current forward markets are almost identical to the situation in Feb 07 following a 4 year bear market. This forwards remained until Jul 07, and the Fed then aggressively cut rates from Aug07 onwards.

  • In that Feb-Jul07 period, USTs remained in a range with negative carry.

  • Current expectations are understandable given the (lagging) economic indicators followed by the Fed.

  • This report highlights that if the past is a guide to the future, a bullish view on bonds from current levels would indicate an expectation of further equity weakness.

  • The conclusion shows how bonds are likely to perform in different equity scenarios, noting the recent changes to long term equity sentiment.

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