Bond Markets Rattled as Central Banks Remove Stimulus

With some of the biggest names in the market urging caution and governments flooding the market with paper, debt traders braced for what they feared could be the final days of a three-decade bull market.European debt securities and U.S. Treasuries were relatively steady ahead of a sale of more than a combined $30 billion worth of bonds expected to be sold by the U.S., Germany, Italy and Portugal. Sentiment was fragile, with billionaire fund manager Bill Gross saying on Tuesday that bonds have entered a bear market, noting that 25-year trend lines had been broken in five- and 10-year Treasury maturities. DoubleLine Capital Chief Investment Officer Jeffrey Gundlach said markets had not priced in shrinking central bank balance sheets.Debt markets are being weighed down by prospects of central banks in Europe and Japan moving away from their stimulus plans. Markets were also braced for possible debt syndications from Italy and Portugal, alongside a German auction on Wednesday. The U.S. Treasury auctions $20 billion of 10-year debt in a re-opening later in the day.

Source: Global Bond Markets on Tenterhooks as Sentiment Stays Fragile – Bloomberg

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.