'Bond vigilantes' are selling Eastern European, Dubai, Irish and Italian debt and at some point will go for bigger bait, Guy Monson, managing partner and CIO of Sarasin & Partners, told CNBC late Monday.
"We could be going back into that bond market vigilante territory. Dust off your old sovereign trading skills," Monson told European "Closing Bell."
Global investors who demanded higher yields on US Treasury bonds from the late 1970s through the 1990s to hedge against inflation came to be known as "bond vigilantes." With low inflation and easy credit over the past 10 years, they had largely disappeared but now analysts say that they are coming back.
Triple-A corporate bonds will take on a new role versus government bonds, as investors may think that multinationals, such as Royal Dutch Shell , IBM or Nestle, could have better credit than some governments, Monson added.
But Sarasin, which manages over 8 billion pounds ($12.8 billion), has begun to buy Irish debt at the expense of German debt, and "…is looking at the possibilities in Greece," said Monson.
An IMF mission is set to visit Athens to discuss the country's budget management ahead of a crucial meeting between the Greek government and EU officials. Speculation has run high as to whether the IMF will be forced to step in to aid Greece if the European Union decides not to bail out its peripheral neighbor.