Last week, bond yields spiked to nearly 1% on the vaccine news.  Today the move in the bond market was much more subdued. But the yield on the 10-year Treasury, at 90 basis points, at a moment when lockdowns are ramping up again, is very firm, and looking a bit concerning. 

As we discussed last week, we may have seen the catalyst to mark the end of a bull market in a very, very long trend in bond prices (specifically U.S. Treasuries).

That catalyst to kill the bond bull market might have been last Monday's vaccine announcement.  With visibility toward a "return to normal" coupled with record high savings rates and trillions of dollars of new money sloshing around the world, rising Treasury yields (lower bond prices) could be the signal of some hot inflation coming down the pike. 

On the other hand, the catalyst to kill the bond bull market might have been the election, and the related deteriorating global confidence in the U.S. government. 

Investment in U.S. Treasuries have always represented the safest parking place for global capital, in the world.  But now we have a environment in the United States that certainly doesn't look as safe and stable as it once did.    

As I said last week, that's a formula global Treasury investors to make their way to the exits.  On that note, tomorrow we get the report on net foreign purchases/sales of U.S. Treasuries.  The expectation is for more outflows in the month of September.  That will add to the more than half a trillion dollars in foreign outflows from our government bond market since May.