The bond market, which is highlighted by Ray Dali and Bill Gross, will face a few billionth barrier next month.
The strategies of Credit Suisse and JP Morgan predict that stock growth will stimulate the rebalancing of large US pension fund portfolios, which often leads to bond demand. During allocation, managers transferred more than $7 trillion. assets. With the 6 percent increase in Sp500 since the beginning of the year, 10-year bonds fell by 1.5 percent. With these gains and losses at the end of the month, pension funds will buy fixed income instruments for about $24 billion, while at the same time will sell shares worth about $12 billion. The funds only have 5 trading sessions available to meet the rebalancing requirements of their portfolios by the end of the month. Additionally, the Fed's meeting is scheduled for January 31, and this will most likely prompt most managers to make allotment in their sessions before.
According to JP Morgan, any 1% rise in indexes leads to the purchase of $ 25 billion fixed income instruments.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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