Halister News

(Bloomberg) -- U.S. Treasuries richen across the curve, with benchmark 10-year yield dropping 4bps to 2.33% as unwinding of the Trump trade continues after Wednesday’s press conference from the U.S. President-elect revealed little details on his economic plans.

• “Assuming the Fed hikes rate twice or three times this year, the 10-year yield of over 2.5% appears to be an overshoot,” says Makoto Noji, FX and foreign bond strategist at SMBC Nikko Securities in Tokyo
  • Japanese selling seems to have peaked when 10-year yield reached 2.6%
  • Speculative shorts have built up to levels that trigger buyback
  • Sees 10-year yield falling toward 2.00% in the six months; U.S. and global economy may not be as strong as some investors are hoping for
  • Expects Fed to raise rate no more than twice this year
• NOTE: Net short position on 10-year note futures climbed to a record 344,931 contracts in week ended Jan. 3: CFTC
  • Should current 10-year yield falls to 2.00% by July 31, the note would return 4.1%, according to Bloomberg data