Tags: hulbert | treasury | bond | yield

Hulbert: 10-Year Treasury Yield May Hit 4 Percent by Thanksgiving

By    |   Tuesday, 29 July 2014 06:40 PM

Bullishness in the bond market has risen to a near-record high, and that's bad news for bond prices, says Mark Hulbert, editor of Hulbert Financial Digest.

He created a bond-market sentiment index based on the recommendations of short-term bond-market timing newsletters.

Three times during the last six weeks the index climbed to 54.7 percent, its highest level since 2009, Hulbert writes on MarketWatch.

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The last time the index rose anywhere close to that level was in May 2013, when it hit 49.7 percent. "Over the next four months, the Treasury’s 10-year yield rose to 2.98 percent from 1.63 percent, an extraordinary rise in such a short time," he says.

If an increase a little stronger than that 135 basis points happens now, the 10-year yield would reach 4 percent by Thanksgiving, Hulbert notes. The yield stood at 2.47 percent Tuesday morning.

To be sure, Hulbert says tests of his bond sentiment index going back 30 year show that its
predictive power holds mainly for one- to three-month periods and that it has "virtually no explanatory power for the longer term."

Treasury prices have gained recently, as European yields have dropped to record lows, pushing investors to U.S. paper.

"The continuing rally in Europe is keeping a cap on yields here in the U.S," Charles Comiskey, head of Treasury trading at Bank of Nova Scotia, told Bloomberg. "We continue to look attractive to European bonds."

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Bullishness in the bond market has risen to a near-record high, and that's bad news for bond prices, says Mark Hulbert, editor of Hulbert Financial Digest.
hulbert, treasury, bond, yield
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2014-40-29
Tuesday, 29 July 2014 06:40 PM
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