The Tell: The bond market is ‘coiling’ for a violent yield surge, says BMO strategist

Trading in Treasurys has been unusually muted in recent weeks, with yields traversing a narrow range. But to at least one strategist, this subdued action is evidence that a sharp selloff in the bond market—with yields inversely jumping higher—could be imminent.

Ian Lyngen, an interest-rate analyst for BMO Capital Markets, says the 10-year Treasury yield TMUBMUSD10Y, +0.32% has traded in a range of eight basis points, or less than 0.1 percentage points, between 2.80% and 2.90% in the last 14 trading sessions since June 28.

Lyngen said periods marked by such tight trading bands are “ultimately bond bearish as a theme,” he said, in a note dated Wednesday.

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