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Bonds "in greatest bear market of all time" - BofA

2023-10-06 18:26
LONDON The rout in the fixed income market is causing the "greatest bond bear market of all time",
Bonds

LONDON The rout in the fixed income market is causing the "greatest bond bear market of all time", Bank of America Global Research said in a note on Friday, as the peak-to-trough loss in the U.S. 30-year yield hit 50%.

In its weekly 'Flow Show' report, BofA said bond funds saw $2.5 billion of outflows in the week to Wednesday, but Treasuries saw inflows of $4.6 billion, their 34th straight week of inflows.

"No capitulation here," BofA strategists, led by Michael Hartnett, said.

Yields on 30-year Treasuries rose above 5% for the first time since 2007 on Wednesday, as investors fled fixed income.

Equity funds saw $3.3 billion of inflows, taking the year-to-date inflow of $110 billion.

"Investors have sold neither bonds nor stocks in 2023," BofA strategists said, "…everyone 'bearish' but nobody 'sold'."

(Reporting by Samuel Indyk; Editing by Amanda Cooper)