U.S., Japan, Aussie Bonds Fall on Growth Bets, Stock Gain – Bloomberg 02-03-13

Salient to Investors:

Rising long-term rates indicate traders expect the economy to pick up.

Bill Gross at Pimco is avoiding long-term bonds, and sees US inflation benign in 2013 and possibly rising in 2014 to 2016 on faster inflation.

Hiroki Shimazu at SMBC Nikko Securities said the recovering global economy is pushing up yields and equity markets around the world.

FRB of St. Louis President James Bullard said the US economy will gain enough momentum to let the Fed to reduce the pace of bond-buying as early as mid-2013.

Derivatives traders are signaling there’s little chance of a bear market in Treasuries for the next three years.

The 14-day relative strength index for the 10-yr Treasury yield indicates to some traders that the rate has advanced too quickly and may be set to reverse course.

The Fed’s 5-year forward break-even rate is at its highest since August 2011.

Read the full article at http://www.bloomberg.com/news/2013-02-04/treasuries-decline-after-u-s-jobs-china-services.html

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