Bonds Pare Gains

U.S. Treasuries rolled off the highs hit on the back of a well-received 10-year auction and as equities bounced from the midday sell-off. The market went after the lowest yield/highest price levels since late November on the 10-year, while the remainder of the curve went after early-December levels.

The 30-year recently traded near 2.964% from a post-auction high at 2.925% while the 10-year is near 2.372% after a run at 2.326%. The five-year pared gains to 1.876% from a high at 1.8297%, while the two-year is near 1.185% from 1.1495%.

Chatter has been floating around about the “next tipping point” to set off a bond bear market. Analysts with Action Economics note there’s “quite a debate developing regarding the direction of yields.” While all talk has rates heading higher there is the belief that 2.6% will mark the beginning of a secular bear market, a la Bill Gross of Janus Capital,or if the 3% level is the trigger, a la DoubleLine’s Jeffrey Gundlach.

By Bryan Smith