Bonds and elections

Discussion in 'Economics' started by qazwsxedc, May 23, 2005.

  1. I wonder what's going on in European Govt bonds lately. Two examples:

    UK general election early May. Labour got back in, no one surprised. Gilt rallied for a week afterwards, implying that the market HAD in fact been taken by surprise.

    Election in the German state of North Rhine Westphalia yesterday. Governing Social Democrats/Greens got kicked out of office (moderate surprise) and the federal chancellor then came out and said he wants to fall on his sword later this year, instantly creating a lame duck federal government. HUGE surprise. Yet the Bund hardly moved this morning.

    So the markets DID NOT anticipate the result of the UK election and DID anticipate the move by the German chancellor? Doesn't look right to me. Any comments?
  2. moo


    Perhaps those events have nothing to do with the bond markets?