Pimco could add US Treasuries if market weakens further: Ivascyn

US bonds took a hit earlier this week

"If the PBOC were to precipitate a large sell-off by retreating from the US Treasury market, the value of its existing reserve would fall". It's unclear why China might adopt this strategy, and nothing is official, so panic isn't warranted.

Stocks also dipped, with the Dow Jones industrial average tumbling almost 129 points before cutting those losses sharply to around a 25-point deficit around 11:45 a.m. EST.

On the USA economic front, the Labor Department released a report showing import prices rose by much less than expected in the month of December.

The FTSE100 shrugged most of this off managing to kick on to new record highs, helped by a pound that underperformed, despite a strong performance from the manufacturing sector in Q4, which prompted the NIESR to predict GDP growth for the United Kingdom economy of 1.8%. He sees yields pushing higher to 2.80% in the next three to six months but "not much further" as there is still too much money looking for carry and moving out the yield curve. While investors are right to expect a longer-term shift toward normalization by the BOJ, the most recent move by the central bank doesn't have any new policy implication, said Junko Nishioka, chief economist at Sumitomo Mitsui Banking Corp.in Tokyo and a former BOJ official.

Markets in Europe had a disappointing day yesterday slipping back on profit taking after several days of decent gains, while a similar rally in German 10 year bond yields probably helped push things along, pushing the euro higher back through the 1.2000 level briefly.

The end of a 35-year bond bull market may have been July 2016, when yields on 10-year Treasury bonds hit an all-time low in a "double-bottomed" pattern, although it wasn't apparent at the time, according to Gross.

The action in the bond market sent the dollar lower.

China is enjoying an economic boom
GETTYChina is enjoying an economic boom

More than $60 billion in combined bond sales by the USA, the U.K., Japan and Germany are set to take place this week, which may test the appetite of investors for debt at current levels.

In central banking news, Bill Dudley of the New York Fed and James Bullard of the St. Louis Fed will each be speaking later today.

But most of the other S&P sectors were sold-off, with the worst performers being the interest-rate sensitive real estate and utilities sectors.

What happened on Wall Street?

The economy continues to crank out new positions at a pretty hefty rate, despite December's surprising weakness in retail employment, and eventually employment becomes a case of diminishing returns and employers have to start competing on wages.

Last year, we brought up the millennial concept "FOMO", which means "Fear of Missing Out". The yuan gained around 6.8 percent versus the dollar a year ago. That's just how markets work. A gradual approach could be useful at this point, and do not forget to keep careful track of the average price you pay for each stock.

A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, Jan. 11, 2018.

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