Extremes in Bond Market Sentiment

By Callum Thomas

3 Quickfire charts on US bond market sentiment… some of these sentiment charts are clearly at an extreme – and that’s usually when you go looking for contrarian signals.  But then I look at a lot of charts on the bond market and it’s quite easy to make a case for a major trend change.

1. Speculative futures positioning:  The standout here is speculative futures positioning in the 30 year… gone from around neutral to extreme short.  Total capitulation.

   

2. Stocks vs Bonds futures positioning:  This one shows were equity vs bond market futures positioning lies right now – notice how the gap is at a record high.  Traders are doubling down on growth/inflation here.

3. Bond mutual fund flows:  Last one shows a massive lurch in bond fund flows, with net-outflows the most extreme since the taper tantrum.

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Gary

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