Today's Major Market Move: 3 year US Treasury Note Climbs to 60 Basis Points in Past Four Weeks

We are starting to see hints of an upward movement in bond yields which if it gains steam could have all kinds of interesting ramifications. There's one group of investors that we can definitively say missed out on the rally over the past couple years in both equities and commodities: sovereign bond investors. One of the more pronounced moves has been with the U.S. three year bill which has gone from .44 to .60 in the past 29 days. In fact, every bond duration has gained over that same time frame:

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It's not just the United States. The U.K, Australia, Germany and perhaps most ominously of all, Japan, have all seen interest rates start to inch up in the past few weeks. Japan has been fighting deflation for over 20 years so are they now finally going to get the inflation they've been looking for? With a debt to gdp ratio well north of 200%, Japan may be ill equipped to handle it. The U.K. has been engaged in financial alchemy with QE and with suggestions that the BOE simply void the government debt they hold. Is the market for Gilts expressing some concern for rampant money printing? Another bad omen for Britain is that their yield curve recently became inverted about a week ago, although since then it has 'un'-inverted itself. Inverted yield curves are a classic signal for a recession, although the sign has to last a lot longer than one or two days.