Bond Market Correlation

One factor that is interesting is the relation between the different markets.

As would be expected it turns out that essentially the yields that occur on one government bond market are very closely linked to the required yields in the international government bond market.

When there was a crash in 1994 it was really quite striking to see just how closely the markets were related for the bond yields across the UK, France, Germany, US and Japan - they were extremely heavily related indeed.


Because of huge sums of money flowing this way and that internationally then the bond market particularly follows this pattern even if the economic conditions being experienced by each country are really quite disparate.

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