Bonds: Summary

Buy on the up arrows, sell on the down arrows

This tool is designed to summarise the key action-orientated features of other bond analysis tools, omitting explanations for those who just want to see the bottom line. It incorporates both momentum Buy & Sell signals as well as a proprietary econometric forecasting model created by PIT. For this summary tool, government bond indexes are shown on a total return basis, including income earned. For comparability, they have been rebased to set year-end 1994 at 100.

In each chart the historic total return bond market index, the thick white line,  and the econometric forecast, the thin orange line,  are shown on the same scale and may be viewed from identical left- or right hand axis. The base level for the econometric forecast is the average for the bond market index over the last completed calendar year. Chart technical Buy & Sell signals are shown as red arrows embedded in the price series.

The econometric model is based on equations, tested over 15 years of historical data, where the projections depend on consensus forecasts for inflation and GDP.

Please note that the performance pattern of total return government bond indexes may be radically different from price-only bond indexes, owing to the substantial part of the total return represented by income. Thus Buy & Sell signals for total return indexes will not be the same as for price-only bond indexes.

Owing to the conversion of legacy currencies into Euros, analysis is provided on the common currency, rather than for individual countries. Historical data is provided by creating synthetic GDP-weighted time-series for the component individual country bonds, expressed in the European Currency Unit.

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