Halister News

(Bloomberg) -- Markets “are entering a period of contemplation” that could drive UST 10Y yield back toward 2.20%-2.25% by year-end, Nomura strategists George Goncalves, Stanley Sun and Jason Wu write in Dec. 2 note.

• Rates should rally out of Fed hike; risk-off moves stemming from European political events and ECB could reverse sell- off
• Trump trade largely priced in; defensive positioning suggests rates need to go through “digestion phase” before pushing higher, with 2.35%-2.50% range a key area for UST 10Y to break through
• Solid data in 2H so far, with risk to downside to start 2017, as well as uncertainty of Trump policies and fiscal package; wage inflation “likely to be tame” until U.S. job quality improves