As we have discussed in our daily and weekly publications, global bond markets have experienced heightened volatility in recent weeks.
Since the major central banks embarked on QT in 2022, their balance sheets have shrunk significantly.
This leaves bonds more exposed to the vagaries of the market, highlighted by the recent events in the UK, which has heaped pressure on the new Chancellor ahead of her next fiscal statement in March.
While yields have settled back down for now, the recent events highlight a new market fragility in the current uncertain policy environment.
