Bond bull market over

The charts below show a clear technical break out of the downtrend that's been in place since the beginning of the bond bull market a year ago. (Remember, the price of a bond is inverse to its yield, so if bond yields are rising it means their prices are falling).

See how, while yields were falling the "rallies" (with respect to yield) took the yield back to the short-term moving average, not through it.  Then in September, the yield breaks up through the 50 day moving average, falls back, but the fall in yield doesn't take yield back to the early September low before it rebounds.  A pattern of rising highs and lows emerges.  Shortly after that, the short-term moving average of the yield starts to rise. 

It's possible that this is a bear-market rally (i.r.o the yield) since the 120 day moving average is still falling.  If this is just a short-lived bounce in yields, the market is saying that it expects growth to slow again.  Which will be very interesting because of its implications for policy and equities.

10 year Oz bonds have fallen (in price) in line with Treasuries, because of a contamination effect, mostly.  The Oz economy continues to slide, so there's no good domestic reason for rising bond yields. 

The recovery in the Germany and the European economy look very sluggish too, so I am surprised at the strength of the sell-off in bonds.  But again, treasury yields tend to drive most developed country bond yields, and even though spreads my widen or narrow (or even invert), they tend not to move so much that they alter turning points.  Having said that, the Treasury/Oz bond yield has gone from a point where Ozzie bonds yielded more than Treasuries to one where they now yield less, reflecting deteriorating growth and falling inflation expectations in Australia.