"Bond king" Bill Gross calls a major top in the bond market

Treasuries fell, with 10-year note yields climbing to the highest level in six weeks, as signs the U.S. economy is improving amid central-bank monetary stimulus sapped demand for U.S. debt.

Benchmark yields were set for their biggest weekly increase in two months as the dollar continued to rally versus the yen after passing the 100 level yesterday. The Fed and other central banks are pumping cash into their economies or cutting interest rates, prompting money managers to seek higher-yielding assets. Pacific Investment Management Co.’s Bill Gross wrote in a message on Twitter that the 30-year bull market for bonds “likely ended” on April 29.

“We are seeing the ramifications of the yen move that had the effect of exacerbating the already short-dollar position on the street,” Richard Gilhooly, an interest-rate strategist at Toronto-Dominion Bank’s TD Securities unit in New York. “The move is causing trouble for a bond market that is getting longer as the duration is increasing during the selloff.” A long position is a bet that an asset will increase in value.

The U.S. 10-year yield climbed eight basis points, or 0.08 percentage point, to 1.89 percent at 3:53 p.m. in New York, after touching the highest since March 26, according to Bloomberg Bond Trader prices. The 1.75 percent note due in May 2023 fell 23/32, or $7.19 per $1,000 face amount, to 98 23/32. (more)

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