The longest-term U.S. Treasury bonds are some of the biggest victims of the selloff in recent days.  The so-called long bond has been among the year’s best performing securities as rising prices pushed the yield to a record low over the summer. But pricesÂ reversedÂ in dramatic fashion, with the 30-year yield surging 0.23Â percentage points to 2.461% on Tuesday from 2.236% on Wednesday.  Despite the rise in 30-year bond yields, they’re still quite low by historical standards, and far below where they ended last year, at 3.013%, according to Tradeweb. And they may very well retrace their rise, particularly if central banks recommit to monetary stimulus programs.  But what’s notable is that there’s been little U.S. catalyst for the moves. Traders and analysts are chalking up the selloff to concerns that central banks in Europe and Japan may temper or reduce their ultra-easyÂ monetary policies, after forays into negative interest rates haven’t done as much as some had hoped to revive those economies.  Despite the lack of a clear impetus, the reversal is feeding into long-held beliefs among some investors that the long bond and other assets are overvalued. Indeed, more than half of fund managersÂ think that both stocks and bonds are crowded trades, according to a Bank of America Merrill Lynch survey published Tuesday.  Hedge fund investorÂ Paul Singer said earlier in the day atÂ CNBC’s Delivering Alpha conference that long-term bonds are currently the “biggest bubble in the world” and carry a “never before seen” mismatch between possibility of gains and collapse. “Removing that from your portfolio is a good idea,” he said.  Investors appeared to take that to heart at an auction of 30-year bonds that followed soon after his comments, with someÂ ofÂ those who had been the most fervent buyers of long-term bonds failing to show up in force.Â Indirect bidding, a proxy for foreign demand, was the lowest since January at 57.9%.  Many had attributed the earlier rally in long bonds in part to foreign demand from investors escaping negative yields in Japan and Europe. Now the pile of of negative yielding government debt in other countries is shrinking, which may erode the attractiveness of U.S. assets.  “A month ago you were in a sweet spot,” said Win Thin, global head of emerging market currency strategy at Brown Brothers Harriman “It seems like weâre in another inflection point.”  – David Benoit and Min Zeng contributed to this post.
The market turbulence of recent days is weighing on all sorts of assets, but it's perhaps most prominent in the longest-term U.S. Treasurys.