Market Anthropology: Hot Cross Bunds

Tuesday, March 3, 2015

Hot Cross Bunds

Hot cross bunds. Hot cross bunds. One a penny, two a penny, hot cross bunds. If you have no daughters, give them to your sons; one a penny two a penny, hot cross bunds. – Mother Goose

We’d venture to speculate that not even the Puritan purse of Mother Goose would buy her sons and daughters some hot cross bunds these days. Although the government bond markets in the U.S. and across the Atlantic were both white hot over the past year, the U.S. Treasury market cooled quickly throughout February, while long-term yields in Germany circled back and tested the lows last week. Considering the lay of the land in the markets these days, we’re looking for the investor equivalent of German comfort food to cool off swiftly as well, as a major disinflationary/deflationary trend attempts to exhaust.