JPMorgan's Michele on Bonds: 'The Dominoes Are Starting to Fall'

• The bond market's front end is pricing in approximately four rate hikes, while the long end has become excessively steep.
• JPMorgan Asset Management was buying long-end bonds (US, Japan, Australia) this morning, believing they have gone 'too far' and are 'too cheap'.
• Central banks (ECB, Fed, BoJ) are starting to establish credibility, and the long end of the yield curve is beginning to stabilize.

Bob Michele of JPMorgan Asset Management believes the bond market, particularly the long end of US, Japan, and Australia bonds, has overshot its bearishness, reaching a 'point of maximum pain' and presenting a 'good buying opportunity'. He sees central banks, including the Fed, starting to establish credibility, which should lead to stabilization.