Growth in bond yields is potential for profit from financial shares

Generally, in a situation of growing uncertainty, the global bond market's leading economies grew in profitability. Today at 12: 00h .: Germany Generic Govt 10Y Yield = + 0.78%; UK Generic Govt 10Y Yield = + 0.90%; US 2Y Yield = + 0,82%; US 10Y Yield = + 1,01%; US 30Y Yield = + 0,86%.

Shares of companies that depend on the interest rates are generally a strong positive correlation with the bond market. Logically financial companies are on the rise. Currently: HSBC Holdings (L: HSBA) + 0,34%, shares of Barclays (L: BARC) + 0,57%, shares of Royal Bank of Scotland (L: RBS) + 0,81%, and of Lloyds Banking (L: LLOY) + 1,06%.

As the other things being equal in growth in bond yields, the profitable approach is to buy shares in the financial sector. In collapse in yields on the bond market, the strategy should be directed back to the sale of those shares sector, especially given that the reaction of the capital market is characterized by a delay.

In addition, statistics show that the bond market formed anticipate peaks and bottoms to shares but also changes direction before the capital assets of the financial sector.