They are big on zealous regulation, but they are not good at real economics. They have the power to make micro improvements to the economy, but they haven't even tried it.

They are big on zealous regulation, but they are not good at real economics,

Strip out higher oil prices, and Europe doesn't have an inflation problem. We're still bullish for the medium term.

With demand still weak, there's room to cut rates in the first half of next year. That'll keep yields around 4 percent for 10-year gilts.

This week's data is proof that the hawks in the Monetary Policy Committee are wrong, giving gilts support this week.

European government bonds are going to be the worst performing area in the first quarter. There'll be one more rate hike in the first quarter and another in the second quarter.