Halister News

(Bloomberg) -- UST 2Y yield “should consolidate” around 90bp-100bp and could fall as low as 65bp “in a risk-off environment,” as Fed seems to have reverted to a “talk hawkish and act cautious” approach, HSBC strategist Lawrence Dyer says in March 16 note.

• 10Y yield should consolidate in 1.90%-2.00% range with a near-term target of 1.60%-1.70%
• Fed “has a strong domestic focus,” meaning “it can underestimate the magnitude of the global headwinds and their impact on U.S. rate outlook”
• Low rates in Germany and Japan should keep pressure on U.S. rates, while dovish long-term outlook for ECB and BOJ “are likely to influence investors’ views on the Fed outlook”