Ultra Long Duration Bond Trend Rolls On In Spain

There is a bond trend taking place across the world and file this under what could possibly go wrong.

One can argue in a quantitatively educed yield starved environment, the bond trend’s most visible early indicator occurred when the infamous Petrobras 100-year offering was floated and gobbled up, then later spit out, by investors. The trend is not regarding fraud, as some have alleged in the Petrobras case.

This is a different continuation pattern visible in news reported in Bloomberg that long duration sovereign bonds are gaining popularity. This speaks to a bond trend of institutional investors need to reach for yield despite at times defying long-term logic and what is known about distressed debt dynamics.