Buy anything but European bonds! The recent correction in government bond prices does not reflect a buying opportunity! Capital preservation remains the name of the game!
At least, that's the message from Julius Baer's strategy team after the big bond rout of the last week or so.
The selloff – which has seen government bond yields creep up in both Europe and the U.S. -- can be attributed to a whole host of reasons, from stretched valuations, misplaced deflation assumptions, liquidity conditions and plain old over-crowded trades.
Read More11 reasons why the Bund turned nasty
The current volatility in the bond markets, especially at the long end, does not bode well for fixed income investors, says Julius Baer's Roman Canziani. What's worrying for him is that there was no specific fundamental trigger for the sudden rise in volatility.