The biggest variable in the trend of bond yields is no longer just oil price fluctuations, but also the changes in bond risk structure and new equilibrium levels brought about by the sharp rebound in yields. As mentioned in yesterday's post, 'At this level, there should be a wave of bond market funds gradually starting to buy long-term bonds again because the risk-reward ratio is becoming more attractive.' Just happened to see this shared this morning: Bond ETFs have seen massive inflows over the past 5 days, absorbing $23 billion, accounting for 62% of net inflows, even though bond ETFs only make up 15% of total assets. Bloomberg terminal screenshot shows that, sorted by approximately 1-week fund flows, 6 out of the top 8 are bond-related (cash, municipal, high-yield, treasuries, including TLT). The $23 billion is the total net inflow for all bond ETFs over the past 5 days. Checked the ETF data monitoring website as well, and recent daily data also shows consistent significant inflows into bond ETFs (e.g., on September 28, TLT saw about +$870 million, VTEB about +$590 million; on September 30, VTEB, HYG, MUB, LQD, etc., each saw inflows of several hundred million dollars, with U.S. fixed-income ETFs collectively gaining about +$4 billion that day). The direction and scale align with Bloomberg's data. In other words, bond sell-offs have driven yields to spike, but the sharp rise in yields itself is also attracting some bond market funds. The inflows then help push yields back down. Another point is the new equilibrium level. The stock market right now isn't afraid of bond yields at their current levels; what it fears is another sharp surge from here. As long as there’s no further spike, and yields can even slightly pull back, the marginal pressure on valuations will significantly ease. Pay attention to how these marginal changes drive market dynamics. #Bonds #ETFs #Finance #Markets #Investing #TLT #VTEB #HYG #MUB #LQD #Bloomberg