Strategists Argue the Only Trend for Global Bond Yields Is Upwards

Source: Reuters

Global sovereign yields will only have risen modestly by this time next year, but bond strategists agree the only trend is up, and the gap between short and long-term maturities is poised to widen. DXY down -0.03%, EUR USD down -0.03%

• The recent quarterly poll results align with an uncertain increase in Treasury yields after a decisive change from the pandemic emergency policy by Fed and increasing concerns about inflation.
• The analysts’ reluctance to forecast anything more than average rises in yields might also reflect the years spent by these same forecasters predicting a return to normal only to be softened by increasing demand.
• Meanwhile, the sell-off in US Treasuries this week that increased yields up to levels that have not been recorded since mid-June signals the government bond market is at an inflection point.
• Arjun Vij, portfolio manager of J.P. Morgan Asset Management’s 1.15 billion Global Bond Fund, stated growth is already higher than the market trend, and the inflation rate is high enough.
• He further stated it is natural for interest rates in the developed markets to rise.