Low yields mean bonds are especially vulnerable because a small increase can bring a large decline in price, he said.
‘Too Expensive’
The European Central Bank will probably add to its stimulus measures when it meets July 21, said Enna Li, a debt investor in Taipei at Mirae Asset Global Investments Co. While that may extend the rally, it would also mark a bottom for global bond yields, including those on Treasuries, according to her. Li said she’s considering shorting, or betting against, U.S. government securities later this month.
“Yields will still go down, but Treasuries are too expensive for me,” said Li, one of the managers for the $83 billion Mirae invests worldwide. “The ECB may cut rates. After that, it may be a good signal to short Treasuries.”
The U.S. Treasury this week will auction a combined $56 billion of three-, 10- and 30-year debt.