Will the Calm Continue for the U.S. Bond Market?

Markets ETF Trends

Note: This article is courtesy of Iris.xyz

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By SNW Asset Management

It wasn’t just the kids who enjoyed a summer break this year, as global financial markets seemed to take some time off in the third quarter as well.

While at times 2016 has been akin to a rollercoaster (think oil dropping into the $20s only to double off the lows, or of the Brexit vote back in June), the summer months proved to be a pocket of calm.

The U.S. bond market certainly enjoyed this stability, as yields in most investment grade sectors ended September just slightly above their levels on June 30th. For example, the 10-year U.S. Treasury Note started the quarter at 1.47% and ended at 1.60%. While a modest change in quarterly yield isn’t unheard of, what is unique is the fact that the yields closed within 10 basis points of 1.60% on 83% of all trading sessions.

The quiet wasn’t solely limited to U.S. Treasuries – corporate bonds, municipal bonds and mortgage-backed securities also witnessed range bound interest rates, and hence, more or less flat performance during Q3.

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