Amazing Bond Picture

A geek looks upon the chart below in amazement as the daily patterns in 3 different items combine to send a message.  Now, what is that message?  Inflation expectations are on a bounce?  Yes, we have fully anticipated that.  The rise in 30 year yields is due to an inflationary expectation?  Yes.  Risk is still ‘ON’ (junk bonds’ relative strength) in line with a renewed inflationary expectation?  Yes.

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There was a time when Goldilocks (and her lack of inflation) was putting risk ‘ON’ for equities and bonds.  But on this bounce bonds have taken the hit and those items more traditionally associated with inflationary phases (read: commodities) are getting a bid.

Regardless, it is only a bounce until technical parameters are exceeded.  But it sure is interesting how these 3 Amigos above have fallen in line.

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