HALISTER1: Goldman Recommends ‘Underweight’ in Long-Duration Sterling Rates

Goldman Recommends ‘Underweight’ in Long-Duration Sterling Rates

(Bloomberg) -- The 10-year gilt yield will reach 1.5% by year-end and 2.15% in 2018, favoring “underweight positions in long-duration Sterling rates,” Goldman Sachs analyst Alexander Demyanets writes in note.
  • Expect “further build-up” of term premium in long end of Sterling rates curve as inflation rises, household consumption weakens and CB balance sheets normalize
  • Short-term rates will likely “remain anchored” as BOE has “limited room to ease policy” given expected inflation pickup in near term; bond yields would need to rise amid “macro headwinds”
To contact the reporter on this story: Anna Windemuth in New York at awindemuth1@bloomberg.net To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net Greg Chang

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Source: BFW (Bloomberg First Word)

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Alexander Demyanets (Goldman Sachs Group Inc/The)

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