Bill Gross says bond bear market ‘confirmed’ amid Treasurys selloff

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Market guru Bill Gross said Treasurys were entering a bear market after a selloff in government paper took yields past key technical levels on Tuesday.

Gross, a bond fund manager for Janus Henderson and a former investor at Pacific Investment Management Co., said in a tweet that both the 5-year note yield












TMUBMUSD05Y, +1.84%










  and the 10-year note yield












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  pushed above the 25 year long-term trendline, which has kept a lid on yields. Back in October, he said a sustained climb above the 2.40% level and a break-out above these key charting levels could mark a long-awaited upturn in Treasury yields.

The Bank of Japan’s decision to reduce its buying of long-dated government paper was cited for putting pressure on Treasurys overnight. The selling picked up again as the U.S. trading session got underway.

Gross has made similar predictions before claiming the end of the bond bull market was nigh. He, however, added his bearish wagers hinged on an upturn in growth and inflation. Economists say the U.S. should see a strengthening expansion and more intense price pressures in 2018 amid synchronized global growth.

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See: Bond bull market faces ‘moment of truth’ as 10-year yield crosses 2.40%

But over the past few years, investors have struggled to bet against the steady downtrend in Treasury yields even after the Federal Reserve ended its purchases of government securities and raised rates several times since the financial crisis.

Gross’ comments appeared to draw a backlash in some quarters. A few market participants said his call on an end to bond bull market that has stretched for almost three decades was premature.





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