Geikie-Cobb warns bund yields to spike

F&C Thames River bond duo Peter Geikie-Cobb and Paul Thursby have warned German bunds are ‘extraordinarily' overvalued and in line for a major correction.

The flight to safety out of equities into safe havens has driven German bond yields to record lows, while treasuries and gilts have also seen prices soar and yields reach extreme lows. Two weeks ago, 10-year German bund yields hit a record low of 1.6% as investors ran for cover, although they have recovered some way since then, trading at 2.07% today (Tuesday). Last week Old Mutual Asset Managers’ Stewart Cowley said the global bond market is in the last throes of a rally, even as the Federal Reserve looks to cut yields via Operation Twist. Geikie-Cobb, co-manager of the group’s £9...