Think the Bond Bull Is Dead—Think Again

Headlines couldn't be more bullish for stocks. On a daily basis it seems investors hear another reason why the Dow or S&P is about to explode.

However, if you think the bond bull is failing, MacNeil Curry, top FX and rates strategist at Bank of America Merrill Lynch, says you're sorely mistaken.

Curry told CNBC's "Futures Now" that he thinks the march higher in yields is nearly done. "In the 10 year, I think we top out in yield between 2.05 percent and 2.10 percent," he said.

Curry believes that current weakness in Treasurys has everything to do with anxiety ebbing out of the market due to those positive headlines mentioned above.

However, he sees sentiment changing in a big way; and very soon.

As has happened so many times, Europe again will become a negative catalyst, he said. (Read More: Spanish and Italian Bond Yields Reach for the Skies on Political Woes)

And if the price action in overseas bonds is any indication – he may be right.

On Monday, yields on Spanish 10-year sovereign bonds spiked, gaining 23 basis points to hit 5.40 percent, their biggest one-day rise this year.

Italian bonds moved in tandem, with 10-year sovereign bond yields posting a 14 basis point rise to hit 4.47 percent.

Strategists say yields could spike to levels last seen in the fall 2011 – when the market feared that Spain needed an imminent bailout.

Renewed political uncertainty has again called the fiscal health of both nations into question.

And as Europe deteriorates, Curry sees money flowing into US Treasurys.

"It seems Eurozone issues are coming back to the fore – the EU peripheral debt markets look like they're taking a turn for the worse," Curry said. "We could see safe haven buying. That should be constructive for Treausurys in the near term."

In fact, Curry thinks over the next few weeks and months it's possible that bond bulls will be off to the races. "I think 10-year yields can retrace to 1.35," he said. And by the end of the year he doesn't expect yields to be much higher than where they are now.

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