Low yields suggesting trouble ahead for bonds

After a strong 2003, global bond managers are seeing little sign that yields have much further to fa...

After a strong 2003, global bond managers are seeing little sign that yields have much further to fall and are bracing themselves for rate rises ahead. Strong gross domestic product growth usually holds down bond prices and increases bond yields. But large-scale purchases, particularly of US Treasuries by Asian governments and of UK gilts by life companies, as well as low short-term interest rates, have kept yields lower than expected, according to Henderson Global Investors. In the US, 30-year yields are 4.90%, while for two-year notes they stand at 1.65%, says Denis Gould at Axa Invest...