Bond bottom – no inversion – no recession

The yield on the 10 year US government bond hit 1.45 today and then turned. It is not expected to fall any further. Our positions (held from 3.2% yields) are being liquidated.

The reason for the fall was the abundance of liquidity and the search by excess savings of real yields in a slower growth environment. Yields have turned because fundamentally a new easing round will lead to some non discounted growth..

 

Technically we are also in the deflation scare zones we hit in 2012 and 2016. This was a logical place for yields to turn

 

HH