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US TSYS/STOCKS: ### EXCLUSIVE: Wells Fargo senior strategist Boris Rjavinksi
told MNI that pension fund month-end stock/bond rebalance need on Oct31 won't be
that great as "if you look at how equities performed vs. bonds, the divergence
was not that large" in October. (Wells Fargo predicts "small pension rebalancing
flows" of roughly $4B-$5B stocks selling vs $4B bond buying at month-end.)
- "The reason why see are seeing these flows is that pensions generally have to
keep a certain allocation to stocks and bonds," he said. "When you have mkts
diverge, such as stocks go one way, and bonds go another way, they have to bring
them back into balance."
- "It's too early to predict how the qtrend/yrend pension fund flows will go,"
he told MNI. "Currently the 10y yld at 2.39% is not far off our year-end target
of 2.50%, so the Treasury market in Q4 may not be as volatile as yrend 2016,
when "bonds sold off and stocks rallied" amid reaction to expected higher
inflation/growth possibilities with US Pres. Trump elected Nov. 2016. "There was
a significant amount that the pension funds needed to do" as "you had a big
rally" in stocks," he added.