Bond selloff: The end of the beginning or beginning of the end?

In previous reports, we laid out the case that the selloff in global bonds has been largely driven by a renormalization process from the 2010s, when deleveraging, oversaving, ZIRP, liquidity traps, QE, and deflation dominated the G7 world, producing negative real rates for most of the time.

This process has persisted throughout September, with 10-year yields hitting 5.23% last week. The direct culprits behind last week’s bond selloff were strong flash PMIs, combined with the renewed rise in oil prices.

Unexpectedly and interestingly, the inflation breakeven rate has fallen noticeably since early September, so the weakening bond market has been led by soaring TIPS yields. The crucial question today is: how close is the renormalization process to an end?

Download the report to find out:

• How close is the global bond market selloff to an end?
• Are U.S. Treasury yields already too restrictive?
• Is the forward market too aggressive in pricing in four additional rate hikes?
• How should investors think about U.S. fiscal laxity and its impact on bonds?
• Will rising bond yields spoil the equity party?