Reflation Trade Continues As Yields Climb, Bond Rout Intensifies

Well, the reflation trade (see here for more) marches on as the 10-year tacked on another 6 bps to move to 2.47%: This is is something you need to pay close attention to. Remember, we're talking about some $1 trillion in losses since July. Here's Goldman: We predicted that a 100bp interest rate shock would translate into over $1tn in market value losses. Recent events tested that prediction, as 10-year Treasury rates have risen 100bp from the lows in July. Over the same period, we estimate that market value losses for the Barclays US Aggregate Bond Index amounted to $910bn. And here's Bloomberg with a summary of today's action and what's in store: Treasuries declined, with benchmark yields approaching 2016 highs, as stronger-than-forecast U.S. consumer sentiment bolstered bets that the Federal Reserve will raise interest rates next week. The U.S. 10-year yield rose six basis points to 2.47 percent at 4:47 p.m. in New York, nearing the 2.49 percent level reached last week, the highest since June 2015. The benchmark 30-year yield set a 17-month high at 3.17 percent. The Treasury will hold auctions of both maturities next week ahead of the Fed’s decision on Dec. 14. Ten-yea