Well, May tends to be flat & choppy at the long end so in the near-term everyone is going to be right. But then come ~June 1 yields tend to drop ...
If 'flat to choppy' is a reprieve to you so be it. For some who like to trade flat markets, it could be an emerging opportunity. For those looking for a long entry, its a heads up to be patience but decisive this month ...
Actually I like trending markets, they are easier to anticipate. We finally get one in bonds, and the stock market goes dead. I guess I'm like you, a position trader. I shorted the top but got out early, and then got interested in another market. Bonds are fun, but you rarely get 2% moves in one day.
The Standard & Poor is stuck at 1310 and markets seem to be shifting their attention to clues pointing to slower growth, such as the real estate cool-off. Higher commodity prices, combined with China's rate hike, will contribute to a changing sentiment that will respond to the next opportunity to buy oversold bonds, which could be as early as next week.
Since your opinion is that we are something like half a point away from an intermediary bottom, I would say so.
The deflationary influence has been strong enough to keep inflation low even in a period where commodity markets have been rising sharply. So I guess the question is, will commodity prices continue to rise as sharply as they have, if not, then I think that points to lower inflation. In the past rising commodity markets have been inherently inflationary, but that was because it ignited a wage spiral, when inflation expectations are anchored due to inflation targeting I think its only a question about the extend costs can be passed along to consumers. The rising rate environment and the consumerâs higher and higher debt level will make it increasingly harder to pass costs along. And for bonds. I think the future looks bright, itâs the only asset class in witch investors havenât been burned lately except real estate. Commodity 97-00, stocks 00-02. Where will investors put their money if real estate fails them? The demographic influence is a long-term factor, but I think it acts as a roof for yields, getting lower and lower. Soon this and forward looking investors will hit the momentum ball the other way. I only hope the protectionist talk is only talk. If not that could probably be inflationary? But it would probably reduce world growth, so I donât know..