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Don’t get too comfortable with low bond yields

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So far this year, bond yields have thwarted expectations they would rise, but many analysts are sticking with their calls for a march higher.

"We are either at, or very close to, a significant turning point where yields are going to start to move decisively to the upside," said Patrick Perret-Green, senior strategist at ANZ, in a recent note. "It is now time to enter outright bearish positions."

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Analysts have been expecting bond yields, which move inversely to prices, to rise since May of last year when the U.S. Federal Reserve first broached its plan to taper its asset purchases. In response, the 10-year U.S. Treasury yield rose from 1.60 percent in mid-May of 2013 to around 3.0 percent at the start of 2014. But despite expectations it would rise further, it has retraced to around 2.52 percent currently.

Perret-Green expects the 10-year bond yield will rise to 2.80 percent over the next four to six weeks, with a growing risk it will head toward or above 3 percent by the end of the third quarter.

Read More Pimco's 'new neutral' gets some pushback

ANZ isn't alone in sticking with expectations low yields' days are numbered.

"If history is any guide, it won't be long before the yield begins to climb in earnest ahead of a first rate hike that we expect in the spring," said John Higgins, an economist at Capital Economics in a note earlier this month, citing the Fed's seven major tightening cycles since the early 1970s.

In all seven cases, the 10-year Treasury yield hit its trough on average around seven months before the first hike in the federal funds rate, he said. He expects it to end this year at 3.0 percent, before rising to 3.75 percent by the end of 2015.

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To be sure, some don't expect interest rates will go much of anywhere anytime soon.

Pimco believes central banks' return to normal interest rates will be slower and lower than in the past, a view it calls the "new neutral." It expects central bankers will aim toward zero percent real policy rates, compared with the current negative real rates, well below "normal" real rates of around 2 percent, with a 4-5 percent nominal policy rate, that were common in decades past.

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But that's a view getting met with some skepticism.

Goldman Sachs believes U.S. Treasury yields have lost ground this year in large part due to easy monetary policies in Japan and the euro zone, which helped fuel a "grab for yield" across the credit spectrum.

Read More How long can Treasury yields stay this low?

"This has depressed long-term yields globally and contributed to the rally in U.S. Treasurys from levels that, at the start of this year, looked reasonable relative to the prevailing macro outlook," Goldman said in a note last week.

But with its forecast, shared by the consensus, that U.S. economic growth will gather speed over the next few quarters, Goldman expects bond yields to rise again over the next six to 12 months.

It forecasts the U.S. Treasury yield will rise to 3.0 percent by the end of this year and 3.5 percent by the end of next year.

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1

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