Jump in eurozone bond yields not a bear market

Could it be that the bond market is poised to follow the advice of Bart Simpson, who often remarks "Eat my shorts!"?

After the recent rout in the market, and the catchy "short of a lifetime" label for Bunds from veteran fixed-income giant Bill Gross, there is no dearth of analysis on the outlook for government debt markets.

Fresh thinking from Danske Bank concludes that the recent sell-off does not represent "a new long bond bear market," with the European Central Bank's quantitative easing stimulus programme providing support.

"The fierce fixed income sell-off has been mostly technical in nature, and in our view created value in the short end of the German yield curve," said Allan von Mehren, Danske's chief analyst.

"A simple explanation for what is going on is profit-taking in crowded QE trades."

Srikanth Sankaran, analyst at Morgan Stanley, says that there are more potential buyers to support the market as well as the ECB.

"While the risk of potential selling from total-return-driven investors cannot be ignored, we expect it to be more than offset by a stronger bid from insurers and pension funds.

"We expect increased allocations from yield-driven buyers to mitigate any short-term impact of potential selling from price-sensitive investors."

While there may be more turbulence ahead - not least with Greece's bailout hanging by a thread - it could be that patience will pay off.

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