Barclays Says Only Stocks Crash Can Rescue Bonds, as Fed Likely … – Bloomberg
Global bonds are doomed to keep falling unless a sustained slump in equities revives the appeal of fixed-income assets, according to Barclays Plc.
“There is no magic level of yields that, when reached, will automatically draw in enough buyers to spark a sustained bond rally,” analysts led by Ajay Rajadhyaksha wrote in a note. “In the short term, we can think of one scenario where bonds rally materially. If risk assets fall sharply in the coming weeks.”
The rout in Treasuries has sent shockwaves through the global bond market in recent months as investors position for borrowing costs to stay higher for longer. While the selloff abated on Wednesday, traders are on high alert for a resurgence in volatility — especially if US non-farm payrolls data on Friday come in stronger than expected.
The US central bank is unlikely to ease up on its so-called quantitative tightening program, which makes it a net seller of Treasuries, according to the Barclays analysts. Additionally, the increase…
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