What a snore bond futures have been lately…. Take the 30yr bond futures. Since rising 21% from Apr. – Aug., then selling off  11% from the end of Aug. through mid Dec., they have been locked in a tight range of just +/- 1.5% from their average.

We mentioned in a newsletter last year how managed futures prefer trending fixed income markets and underperform in sideways markets (click here and look for chart near the bottom of the piece), and the performance of managed futures so far in January (Newedge CTA index currently down -1.4% in Jan) while bonds have been locked in a sideways move supports that conclusion.

We’ll need something to break bonds out of their funk before we see any real returns for the overall managed futures space.  Signals that there will be no QE3, that the Fed won’t keep reinvesting dividends, a signal from the Chinese that they are no longer interested in US treasuries, or a stock market sell off and flight to security rally – are all possibilities…