Organization of petroleum exporting countries (OPEC) reached a production agreement, prices will rise, inflation is expected to rise incoming new United States Treasury Secretary Steven Mnuchin and intends to vigorously stimulate economic growth, bonds have been sold over November loss its best since 1990. CNBC and the United Kingdom reported by the financial times in November, "Bloomberg Barclays Global Aggregate Bond Index" bond index lost $1.7 trillion, the worst record since 1990. Into December, the bond market continues to be dangerous on Thursday (December 1) yields jumping again, in the United States on the 10-year bond yields rose 2.49%, for the highest level since June 2015, converges to a late 2.44%.
Yields and bond prices reverse trend, yields rise, bond prices will fall. Seen as miserable in the bond market is one of the reasons the price of oil rises, which will bring rising inflation, which erodes bonds ' real pay, more heavy selling pressure in the bond market. Come Friday United States employment report will be released, are expected to be well confirmed United States economy improves, and it also added selling pressure increased.
Not only that, Trump specified Mnuchin of the Finance Ministers proposed a massive fiscal stimulus package, intended to stimulate the United States economic growth, increased to 3~4%. Analysts warned that economic growth accelerating, inflation increased and heavy government borrowing to finance tax cuts and infrastructure will put the bursting bond yields next year.
Now bond yields above 2.4%, the next level is 2.5%. European bonds also were sold.
The Wall Street Journal reported that Tradeweb offers displays, Germany 1st in 10-year bond yields rose to 0.378%, a record closing high since January.
Bond King Gundlach (Jeffrey Gundlach) predicted that judge over the next five years, bond yields will rise to 6%, recommended buying United States inflation-resistant bonds (TIPS).
Gundlach, DoubleLine Capital Executive said 4-5 years in the future, United States 10-year bond yield will rise to 6%, mainly because Trump-friendly policies to drive economic growth and inflation, bad for bonds. Gundlach estimated Trump to binge on borrowing, built infrastructure, inflation may rise to 3%, GDP nominal growth to reach 4~6%.
He said that if GDP nominal growth came to 4~6%, bond yields are unlikely to be less than 2%. But Gundlach suggested investors may enter on dips. CNBC reported that Trump under United States, Gundlach that the best investment is the subject of finance, raw materials and industrial stocks.
Gundlach also recommends investors to bargain while Treasury prices, which must be kept at a distance for corporate bonds, because corporate bond prices seem overvalued, and interest rate risk.
Above is not responsible for the risk of investment losses
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