Negative Yields Have Turned Bond Trading Into a Commodity Market

Negative yields have so contorted the global bond market that it's starting to look like a trading venue for commodities, according to JPMorgan Chase & Co.’s asset-management division.

The pile of debt yielding less-than zero is expanding as central banks gobble up assets to stimulate their flagging economies — a dynamic that has radically changed bond investing, according to JPMorgan's Oksana Aronov. Investors should now think of a negative-yielding bond as a commodity, remembering Warren Buffett's assertion that with commodities you are simply betting on what someone else might pay for them at some future moment, said Aronov.