The story of 2021 / 22 has been the major rise in inflation and hence bond yields, I remind subscribers of 2 points that will hopefully add some alpha through 2022:
- MM called bonds to make new 2-year lows in early 2022 which was likely to lead to major underperformance from the growth stocks – 10/10 so far.
- However at the same time we called this move to fail and bonds to rise in the ensuing months, eventually reversing some of the recent sharp sector moves – time will tell but the markets positioned for bonds to fall further.
NB When bonds fall yields rally and vice versa.
MM remains bullish Australian 3-year bonds from the 94.50 area
