Almost a year ago when we wrote Spring but not sprung we were worried that the government was too risk averse, but never thought we would still be in lockdown as a second spring arrives with most of the West still ordered to remain at home.

March is a key month for most asset allocators, as the options expiry on the third Friday of the month is one of the first major opportunities to ‘reposition’ portfolios by putting on new hedges, rolling existing ones, or allowing them to expire at ‘triple witching’.

One of the most important things to understand about Bond Markets is that the day to day movements have surprisingly little to do with the fundamentals that the financial economists spend the whole day talking about.

We like to look at markets as being driven by the behaviour of three different groups – the short term speculators, the medium term asset allocators and the longer term investors.

Sentiment is an important driver of short term markets and with Chinese money being an increasingly significant factor in markets generally, so an understanding of Chinese psychology and sentiment becomes genuinely relevant.