Cowley: Bond market rally is in its death throes

OMAM's Stewart Cowley has said the global bond market is in the last throes of a rally, even as the Federal Reserve looks to cut yields via Operation Twist.

The group's head of fixed income said the Fed's plan to buy $400bn of longer-dated treasuries by June 2012, while selling an equal amount of short-dated bonds in order to flatten the yield curve, was "the latest in a series of increasingly desperate acts" and one which would have a limited effect. Cowley had started shorting the US treasury market at the start of this year but moved his £497m Global Strategic Bond fund to more of a "classic" bond fund position, saying he had been forced to change his thinking following summer's tumultuous market movements. Benchmark 10-year US treasur...