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Are We Missing The Real Signal In This Bond Selloff?

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Breakdown

0:04lesson

Global bond market analysis amid rising yields

  • Separate scary headlines from market signals
  • US 10-year yield back through 5%
  • Japan 10-year yield crosses 3% since 1996
  • UK sells 30-year gilt at highest yield since 1998
  • Australia yields back to 2011 levels
1:48lesson

Bond market dynamics and term premium

  • US 10-year yield moves 29 basis points in 2 weeks
  • Two standard deviation move in timeframe
  • Oil prices rise gradually, not sudden spike
  • No failed auctions or market shocks
  • VIX remains low despite yield rise
3:32lesson

Decomposing bond yields and inflation expectations

  • ACM model estimates term premium
  • Term premium rises as investors demand more for duration
  • 5-year break evens at 2.32%
  • Inflation expectations remain anchored
  • Market charges more for duration despite cooling inflation
5:16lesson

Global synchronization of bond yield moves

  • Multiple central banks tightening rates
  • Global price of long bonds rises
  • US curve flattening with 2-year yield up 37 basis points
  • Term premium connects global bond market
  • Japan's BOJ and JGB yields rising
7:04lesson

Japanese investor behavior and global bond flows

  • Japanese investors dump global bonds at fastest pace since 2022
  • Still net buyers of US assets
  • Treasuries in Japan down, gold rising
  • No evidence of concrete rotation yet
  • Money finds new home in US assets
8:46lesson

Term premium implications and investor behavior

  • Term premium rising due to central bank tightening
  • Investors prefer rolling short-term bonds
  • No clear signal of yield top
  • Watch flows and continued yield rise
  • Global yields could push higher
10:23lesson

Market's refusal to buy debt at old prices

  • Global investors demand more for duration
  • Inflation expectations remain contained
  • Market buys debt but at new prices
  • Signal vs noise: synchronized global yield rise
  • No clear conclusion on yield trajectory

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