"We are positioned for a very big bond rally, and we think that risky assets are completely underestimating the risk of a recession or something nasty happening," he added.
(.MERW0G1)An early sign that the bond outlook is improving came last week with data showing euro zone business growth stalled in June.
In response, German bond yields, which move inversely to prices, posted their second biggest daily drop since March.
But highlighting how hard economic data has become to read, higher-than-expected U.S. first quarter growth and German inflation sent yields surging on Thursday.
Major central banks fighting a surge in inflation have collectively raised borrowing costs by over 3,750 bps since September 2021.
Persons:
Jason Reed, Mike Riddell, Viraj Patel, Vanda's Patel, BoE, Urban, Jill Hirzel, Dhara Ranasinghe, Harry Robertson, Catherine Evans
Organizations:
U.S . Federal, REUTERS, Bond, U.S, Federal Reserve, European Central Bank, Bank of England, Reuters, Allianz Global Investors, Vanda Research, Deutsche Bank, General Investment Management, Insight Investment, Thomson
Locations:
Washington, hawkish, Canada, Britain, Norway, Sintra, Germany, United States, U.S