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Facing their worst week in the history of the euro, Germany's
10-year government bonds saw yields hit eight-month highs just
shy of 1 percent on Thursday, before reversing course to trade 3
basis points lower on the day at 0.83 percent.
"Bunds start to get interesting at around the 1-percent level,"
Rieder told Reuters.
Bill Gross, the widely followed bond investor at Janus Capital
Group, tweeted on April 21 that German 10-year Bunds were "the
short of a lifetime," when they were yielding around 0.10
percent.
In his June Investment Outlook, he noted that his bet against
Bunds was well timed, but not well executed.
BlackRock, the world's largest asset manager with $4.8 trillion
in assets under management, has been adding to its position in
Europe and overall Rieder is bullish on the region, despite
uncertainty around what will happen with Greece, he said.
Greece earlier delayed a key debt payment to the International
Monetary Fund due on Friday as the government demanded changes
to tough terms from international creditors for aid to stave off
default.
"That back and forth will be on for another week or so," Rieder
said.
He also dismissed the idea that the European Central Bank might
end its quantitative easing program early.
"While the European economy is doing reasonably well, the ECB
isn't going to end the program before September 2016," he said.
While other investors are revising their forecasts to say that
the Federal Reserve may not raise rates until 2016, Rieder is
sticking to September for a U.S. rate hike.
"I think this Federal Reserve has shown the propensity to be
patient and wait longer, but we think there is plenty of impetus
for them to move," he said.
(Reporting By Jessica Toonkel, additional reporting by Jennifer
Ablan in New York; editing by Christian Plumb, Bernard Orr and G
Crosse)
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