Bonds (and their prices) are critical to investors as they reflect the health of the economy and the level of risk in the market.

Bond prices are the cost of purchasing a bond, a type of investment that represents a loan made by an investor to a borrower.

They are typically issued by corporations or governments to fund projects or operations and come with a fixed interest rate.

When bond prices fall, yields rise, indicating that investors demand higher returns for the increased risk they’re taking on by lending money.

Recession Signal

Movements in bond prices can signal economic changes. In a buoyant economy, bond prices may fall as investors seek higher-return investments.

Conversely, during market turmoil or ahead of a recession, bond prices often rise as investors look for safer places to park their capital, which is known as a “flight to quality.”

Other than in the HOPE framework, which observes prices, we look to bonds through the lens of the yield they offer, and how it inverts.

Track this yourself

There are many different bonds available to purchase, over many different time periods.

We would keep an eye on the 10y bond price, not for a particular number, but for the price to start increasing: https://www.tradingview.com/chart/v7ZG3yMA/?symbol=TVC%3AUS10

As the price of a bond, and it’s yield are inversely connected, when the price of a bond starts to increase, the yield decreases. It’s usually easier to look at the yield chart instead, knowing that when the yield goes down, prices must be going up.

https://www.tradingview.com/chart/v7ZG3yMA/?symbol=TVC%3AUS10Y