Bond Traders Unnerved by Surprise Selloff Ahead of Pivotal Week
- Global sovereign debt tumbles as Draghi damps QE speculation
- Traders run gauntlet of debt auctions, economic data next week
Markets Not Reflecting Message of 'Dovish' Draghi: Moec
Government debt from the U.S. to Germany to Japan plunged this week, shattering a calm that pervaded bond markets for months, as concern escalates that central bankers globally are reconsidering the efficacy of extending monetary stimulus that’s driven yields to record lows.
Longer-dated securities, which have been outperforming in recent months, led losses, with 30-year Treasuries recording their biggest two-day selloff in more than a year. ECB President Mario Draghi said Thursday that officials didn’t discuss an extension to the institution’s bond-purchase plan, disappointing investors who had been speculating that more stimulus was imminent. In July, Bank of Japan Governor Haruhiko Kuroda opted against expanding the nation’s unprecedented easy money policies, fueling speculation the BOJ plans to change its asset-purchase strategy.