El Erian says “ton of cash” on the sideline helping to limit losses in global bonds

Mohamed El-Erian spoke with Bloomberg Television on the global bond market:

• sale of $39 billion 10-year US Treasury notes Wednesday had “massive indirect demand”

• “I can only reconcile it by the ton of cash that’s on the sideline, and the fear that if you don’t lock in interest rates now, you will lose interest income in the future. Every time we have a backup in rates, we have people rush back in.”

• Recent price action in Treasuries is fueled in part by “money on the sideline being put to work quickly,”

Adam wrote on locking in high a rate fixed income investment way, way back in the first week of July:

• I believe this is a rare moment to lock in investments with high rates for a long duration

Good to see folks are catching up.

This article was written by Eamonn Sheridan at www.forexlive.com.