Bond investors have been hit hard this month as the US recovers and people get ready for the end of qualitative easing; the effects have proven to be farther reaching than many expected as beta between US Treasury bonds (UST) and European government bonds increase. Emerging markets are also taking a big hit as a result, explains Societe Generale analysts Vincent Chaigneau, Mary-Beth Fisher, and Wee-Khoon Chong in a recent report.
Correlation between US bonds and European bonds
USTs were expected to be sold off as the US economy improves, but the strong correlation between USTs...