Prepare For The Global Duration Sell-Off, Warns BAML

“We remain bearish global duration,” that’s the view of Bank of America’s rates analysts Ralf Preusser and Shyam S.Rajan, who in this week’s issue of the bank’s Global Rates Weekly research report, explain why they’re selling long duration bonds. The average maturity of outstanding bonds has lengthened in recent years — with the likes of Austria and Argentina joining the 100-year club — as investors have sought out yield at any cost. When bond yields rise, the price of longer-dated debt falls faster than those of shorter-term maturities and investors exposed to this duration risk have been hit with a sudden shock…