Bond Market Massively Oversold

Financial Research, Money Management • May 3, 2022 at 2:16 PM EDT

The sell-off in bond prices over the last six months has been extreme, to say the least.

The sell-off in bond prices over the last six months has been extreme, to say the least. There are a number of ways we could highlight the carnage for bond investors, but one way is to look at how far bond indices are trading below their 200-day moving averages. As shown below, the Bloomberg US Aggregate Bond Market Total Return index is currently 8.5% below its 200-day moving average.

Going back to 1988 when daily price data begins, the 200-DMA spread is currently 2x more negative than any prior extreme oversold reading.

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