Bond Investment Strategies

Trading on Market Signals

How do investors translate market signals into successful trades? The Global Fixed Income and Foreign Exchange Strategy team at JPMorgan Securities identified seven bond market signals in four market-driving categories, tested their theories and combined the signals into a composite bull/bear index on the market known as the Bond Barometer. Note: The categories use US Treasury Bonds but in considering the ideas in this article, European investors can substitute their local government bond provided it is rated AAA. If not rated AAA, an investor should use another European bond of the same currency (if possible) as a substitute in considering the ideas in this article.

Following are the seven signals by category and the trades they were tested on:

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