Surprise No. 6: Despite a growing concern that interest rates will rise, the yield on the 10-year U.S. note remains range-bound.
The big up move in yields that I have (long) expected and that has now become consensus is delayed by at least another six months. The yield on the 10-year U.S. note stays in a relatively tight range of between 1.5% and 2.0% in 2013, as slowing global growth remains the bond market's dominant influence. Strategy: Buy bonds on weakness via iShares Barclays 20+ Year Treasury Bond Fund ( TLT); short bonds on strength via ProShares UltraShort 20+ Year Treasury ( TBT).