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The end of the second quarter could be quite volatile with pensions funds and large investors likely to book some of their stock market gains and rotate money into bonds. 

“We estimate that US corporate pensions will move above $35 billion into fixed income,” said Michael Schumacher, director of rates strategy at Wells Fargo and added that, “it would be the largest flow in the six years he has been tracking portfolio rebalancing,” according to CNBC. 

Meanwhile, JPMorgan expects a bigger $65 billion quarter-end rebalancing into bonds. 

After all, equity markets have rallied sharply in this quarter due to the massive monetary and fiscal lifelines launched by the US and global authorities to counter the coronavirus-led slowdown. Meanwhile, bonds have lagged behind. As of Tuesday, the S&P 500 was up 21% on a quarter-to-date basis while the US 10-year bond price was down over 9%. 

Put simply, equities may face some selling pressure in the five trading days to June 30. That may bode well for haven currencies like the US dollar and the Japanese yen.