He pretty much says what I have been writing about...ie...it is large pension funds buying treasuries (as they sell stocks to take some risk off the table after moving from 77% funded to 90% over the past 1.5yrs). Guy must be the only Wall St strategist who is bullish on bonds:
Via Scotiabank's Guy Haselmann,
Long-duration Treasuries continue to look attractive; a view that I have unwaveringly maintained for the past six months for a variety of diverse reasons. I am still targeting a 2014 low by the end of the summer (3.29% from May 28th), as well asa sub 3.00% 30-year by the end of the year.
However, active traders should be aware of the 2014 pattern where yields rise at the beginning of each month into the Employment Report, but then (mostly) resume falling for the rest of the month. In the days leading up to payrolls, traders who own long-dated Treasuries should temporarily hedge via legging into flatteners.
Of all of the various reasons, private pension demand is the most interesting and compelling. Since it is also the most misunderstood, I plan to devote my note on Friday specifically to the topic (traveling until then). The bottom line is that PBGC rule changes will cause persistent and incremental demand over time that overwhelms net visible secondary market supply. Concerns about funding status will trump the private defined benefit plan manager’s fiduciary desire to ‘maximize return per unit of risk’.