The 10 years moving average passes in area 4.10%, never surpassed in the secular bear market of the U.S. rates.
Euro Bunds trading weak. Rising rates in Europe could drive US long-term treasury rates higher as well. Recall a Euro area central banker comment that caused US rates to spike higher not too long ago.
The US Tips are still interesting in my opinion. With the recent rates downward it's possible to hedge the inflation with a positive spread.
Good ZH article on what's driving interest rates. http://www.zerohedge.com/news/2013-08-24/whats-driving-treasury-yields
I believe that one of the strongest motivations about the fall of the US bond prices is linked to the strong sales coming from emerging countries, trying to protect the local currencies.
I think once we hit 4.25% on the 30 yr it will be worth looking at the long side. But it would be just like the market to just keep on motoring despite the fundamentals being weak. Everyone is so jaded by low rates. Great time for mkt to clean their clocks.
If that happens, mREITs might be worth a consideration. BoA has an interesting hedge dynamic explanation for rising rates. http://www.zerohedge.com/news/2013-...ll-treasurys-short-gamma-pain-trade-one-watch
I think LT rates have peaked. Bonds had a false break down that snapped back, and they are already starting to price in the taper. Today bonds vs stocks moving in opposite direction. Bonds seem to be responding again to bad economic news. Still I wouldn't touch the mREITs because they can continue to do bad if stock prices take a hit.
The achievement of the 10 years moving average by the TBond has always coincided with the outbreak of a financial crisis. I think the same will happen this time too, and this will help to lower the rates.