Japanese government bond yields jumped on Monday as global debt, currency and equity markets began to absorb a landmark shift by the Bank of Japan to allow yields to rise more freely. Analysts said BoJ governor Kazuo Ueda’s decision to loosen the central bank’s grip on long-term bond yields marked a significant step towards unwinding
Industrial shares are on a tear, junk-bond spreads are narrowing, quants are ramping up Treasury shorts and everyone is piling into stocks. What once was a posture of skepticism among investors has morphed into something approaching euphoria. Cash and hedges are out, replaced by demand for everything from small caps to meme stocks. Fueling the
Considered in isolation, these positioning extremes would suggest a rally in longer-term Treasuries is likely in the months ahead.
These folks have tended to be correctly positioned in bonds over the past several years, and were holding a large net long position ahead of the last big rally in bond prices (decline in yields) in 2018. (Though it is worth noting that they were holding a large net short position prior to the big
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