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Bonds & Interest Rates

Bill Gross: Bond Fundamentals Confusing

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Posted by Bil Gross - Janus Capital Group

on Thursday, 19 January 2017 06:52

"Happiness has dominated risk markets since early November and despair has characterized global bond markets."

"For 10-year Treasuries, a multiple of influences obscure a rational conclusion that yields must inevitably move higher during Trump's first year in office. When the fundamentals are confusing, however, technical indicators may come to the rescue and it's there where a super three decade downward sloping trend line for 10-year yields could be critical. Shown in the chart below, it's obvious to most observers that 10-year yields have been moving downward since their secular peak in the early 1980s, and at a rather linear rate. 30 basis point declines on average for the past 30 years have lowered the 10-year from 10% in 1987 to the current 2.40%."

USGG10YR-Index Graph

...reading Bill Gross Investment Outlook January 2017

 



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Bonds & Interest Rates

At beginning of 'long bear market in bonds...

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Posted by Bill Miller via MarketWatch

on Thursday, 19 January 2017 06:32

Screen Shot 2017-01-19 at 6.38.02 AM... which should help banks, investor Bill Miller says.

The bull market in bonds is over and that should benefit financials, legendary investor Bill Miller told CNBC on Wednesday. 

"We're at the beginning of a long bear market in bonds that will last for who knows how long," he said in an interview with "Closing Bell."

.... continue reading/listening HERE

...related:

The 2017 Bond Strategy Backed By Goldman and BlackRock



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Bonds & Interest Rates

The Global War on Cash

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Posted by Visual Capitalist

on Wednesday, 18 January 2017 11:52

Screen Shot 2017-01-18 at 10.37.10 AM

All around the world, lawmakers are making an urgent push to eliminate the use of physical cash.

It's not only the recent demonetization in India - it's also the Western nations that want to eliminate big denomination bills, including the U.S. and Europe.

See who declared war - and who is going to get caught in the crossfire - in today's "can't miss" infographic for The Money Project.

Screen Shot 2017-01-18 at 10.36.14 AM

....also from Martin Armstrong:

The War on Cash – One Giant Leap Forward For Government



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Bonds & Interest Rates

The Yield Curve is Critical of Fed Credibility

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Posted by Michael Ashton - E-piphany

on Friday, 06 January 2017 07:01

I was planning to write an article today about the shape of the yield curve. Since the Global Financial Crisis, the Treasury curve has been very steep - in early 2010 the 2y/10y spread reached almost 300bps, which is not only unprecedented in absolute terms but especially in relative terms: a 300bp spread when 2-year yields are below 1% is much more significant than a 300bp spread when 2-year yields are at 10%.

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But what I had planned to write about was the phenomenon - well-known when I was a cub interest-rate strategist - that the yield curve steepens in rallies and flattens in selloffs. The chart below shows this tendency. The 5-year yield is on the left axis and inverted high-to-low. The 2y/10y spread is on the right axis. Note that there is substantial co-movement for the recession of the early 1990s, throughout the ensuing expansion (albeit with a general drift to lower yields), in the recession of the early 2000s, the ensuing expansion, and the lead-up to the GFC.



Read more...

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Bonds & Interest Rates

The 2017 Bond Strategy Backed By Goldman and BlackRock

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Posted by Brian Chappatta & John Gittelsohn

on Wednesday, 04 January 2017 09:05

  •  Unconstrained bond funds promise gains in any rate environment
  • $21 billion in redemptions show investors aren’t convinced yet

 

The 2017 Bond Strategy Backed By Goldman and BlackRock

For the world’s biggest bond managers, 2017 might just be the year that unconstrained funds finally live up to the hype.

Although the bond funds -- long marketed for their potential to shine in any environment -- have failed to deliver consistently over the years, bond managers are convinced they’re about to have something of a moment. Donald Trump’s election has reignited the prospects for inflation and growth both in the U.S. and abroad, which will likely lead to higher interest rates and spell the end of the bond market’s three-decade bull run.

-1x-1

...read more HERE



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