Halister News

(Bloomberg) -- Most strategists’ end-2016 forecasts for UST 10Y yield now fall between 1.25% and 2.10% vs 2.25%-3% at start of year, when rising inflation expectations and heavy long-maturity credit issuance were expected to dominate.

• Forecasts underwent a round of cuts in Jan. and Feb. based on weak U.S. economic data, poor stock market performance and multi-year low oil prices
• Latest forecast cuts followed drop to YTD lows, led by U.K. yields to record lows after unexpected vote in favor of exiting EU
• 10Y yield began 2016 at about 2.25%; at that time, lowest forecasts included Citi’s (2.30%) and Deutsche Bank’s (2.25%); among highest were Goldman Sachs’s (3%) and Credit Suisse (2.95%)

• BNP
  • 10Y yield forecast 1.60% since May 26; original forecast 2.75%; MORE
  • Recommended tactical long UST 10Y in April targeting 1.60%; revised target to 1.40% on June 16

• BofAML
  • 10Y yield forecast cut to 1.50% on June 27; original forecast 2.65%
  • Predicted record low yields during 3Q followed by 4Q rebound; MORE

• Citi
  • 10Y yield forecast 2.05%, unchanged since Feb. 12; original forecast 2.30%

• Credit Suisse
  • 10Y yield forecast of 2% since Feb. 18 “is unlikely to be achieved”; MORE

• Deutsche Bank
  • 10Y yield will trade around midpoint of 1.25% through H2, strategists led by Dominic Konstam said June 24; original forecast 2.25%

• Goldman Sachs
  • 10Y yield forecast 2% as of June 27; original forecast 3%; MORE

• HSBC
  • 10Y yield forecast 1.50%; MORE

• JPMorgan
  • 10Y yield forecast 1.70% affirmed June 24; original forecast 2.75%; MORE

• Morgan Stanley
  • 10Y yield forecast 1.75% since March 14; will be reviewed soon, strategist Anton Heese said; MORE

• Nomura
  • Original 10Y yield forecast of 2.5% is in process of being updated, strategist George Goncalves said

• Societe Generale
  • 10Y yield forecast 2.10% since Feb., affirmed this month in 2H outlook; original forecast 2.75%

• TD
  • 10Y yield forecast cut to 1.40% on June 24 vs 2.50% original forecast; end-2017 forecast set at 1.90%