Bond selloff is opening up rare opportunities for investors. Here is where to look, says major bank.

The recent global bond selloff has pushed yields higher, and Standard Chartered's chief investment office argues that bond and money markets have become overly hawkish on the Federal Reserve. In other words, traders may be pricing in more aggressive rate hikes than the central bank ultimately delivers. If that view proves correct, bond prices could recover as rate expectations moderate.

For investors, the significance lies in how sharply yields have repriced. When bonds sell off, prices fall and yields rise, which can make future income streams more attractive relative to recent months. Standard Chartered's note points to select opportunities across bond and money markets rather than a broad call on duration.

What to watch: upcoming US inflation and employment data, Fed communications, and whether market-implied rate paths shift. If data soften, the gap between market pricing and Fed guidance could narrow, benefiting holders of rate-sensitive debt. If inflation stays firm, the hawkish pricing may be validated and the selloff could extend.