Bond Market Commentary Suggests Yield Direction Shifts to Fundamental Factors
What happened
A fixed-income portfolio manager at Lord Abbett noted that the U.S. bond market is showing signs of a slowdown regarding recent yield selloffs. While technical factors may be running out of steam, the direction of yields is expected to depend more on fundamental factors, such as shifts in oil prices. Additionally, rising rates have pushed out the average expected life of loans underpinning mortgage-backed securities, though analysts say these bonds are now extended as far as they can go.
From livemint.com
Why it matters
The commentary highlights that the recent surge in bond yields has distorted other markets. The shift in yield drivers from technical market quirks to fundamental factors, like oil prices, suggests that future interest rate movements could be influenced by global commodity trends.
Barclays analyzes US and global markets.
From livemint.com
Who's involved
- U.S. TreasuryThe subject of the market analysis, U.S. Treasury yields.
- ExxonMobilOil prices are cited as a key fundamental driver influencing future yield direction.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- ExxonMobilSpeculative
ExxonMobil might see changes in revenue due to shifts in oil prices, which are cited as a key driver for future yield direction.
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The entities involved
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U.S. Treasury
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