Bond Bear Beat Down

Takeaway: In the past year, JGB 10yr yields are down 38bps on the most causal factor in all of macro right now, #GrowthSlowing.

Plenty of clever questions in the @Hedgeye inbox on why “JGB yields might rip” (higher)… and they just went lower (again) instead, back down to -0.07% on the JGB 10yr this morning w/ no support to -0.27-0.28%.

 

As Hedgeye Senior Macro analyst Darius Dale wrote earlier this morning:

 

"Investor consensus is far too focused on the risk of policy action (or inaction) out of the BoJ perpetuating a potentially violent backup in bond yields globally and not nearly enough on the underlying drivers of “lower-for-longer” and negative-yielding debt securities – drivers that are set to remain in place for quite some time."

 

In the past year, JGB 10yr yields are down 38bps on the most causal factor in all of macro right now, #GrowthSlowing.

 

Bond Bear Beat Down - japan gov bond 9 20

 

So why in God’s good name would you “invest” at this stage of the #GrowthSlowing cycle as the #BeliefSystem that the Fed, ECB, BOJ, PBOC, BOE, etc. breaks down?

 

Bond Bear Beat Down - central bankers cartoon 06.29.2016

 

Editor's Note: The snippet above is from a note written by Hedgeye CEO Keith McCullough and sent to subscribers this morning. Click here to learn more.


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