Investors less worried about trade wars and Brexit...
...and may have driven prices unsustainably high
Here’s Mohamed El-Erian of Allianz on the latest bond moves:
That’s quite a sharp two-day (and a bit!) move up in yields on US government #bonds. Among other things, it’s indicative of how technically stretched dominant positioning was (and probably still is to a large extent) after a period of such sustained fall in in yields worldwide. pic.twitter.com/YXrfHkHKPm
Marketwatch’s Sunny Oh reckons bond traders are worried that Mario Draghi might disappoint them tomorrow, at his final meeting as ECB president.
Investors are looking ahead to the European Central bank rate decision on Thursday, where it is expected to announce stimulus measures. Push back by some ECB policy makers on the case for further easing, however, has dampened hopes that the central bank will an ambitious stimulus package.
ECB President Mario Draghi has insisted it still has policy tools available amid questions that the central bank has run out of ammunition, but analysts say it’s not clear if monetary policy can boost economic growth in a world where debt yields are already negative.