JPMorgan are flatly dismissive of the counter-intuitive price action and urged clients this week: “Do not read too much into this month’s bond rally”. It reckoned it was skewed by volatility-sensitive investors and speculative positioning, and offered opportunities to reduce “duration” in core markets
JUST who or what is holding down US government borrowing rates has become one the big financial questions of the year – at least for those who think the Fed’s ongoing bond-buying programme is not a good enough explanation.
The puzzling slide in Treasury yields around second-quarter inflation scares has fingers pointing at several culprits – wily Federal Reserve communications on “transitory” price pressures, leakage from a temporary cash flood in money markets, wrong-footed speculators or even skewed debt sale dynamics.
Win a prize this Mother's Day by subscribing to our annual plan now! T&C applies.
