HALISTER1: UST 10Y End-2016 Forecast Cut to 1.40%, Credit Suisse Says

UST 10Y End-2016 Forecast Cut to 1.40%, Credit Suisse Says

(Bloomberg) -- Forecast lowered from 2% based on factors that have pushed many G-10 yields to record lows in recent weeks, Credit Suisse strategists led by Praveen Korapaty say in note.
  • Factors include:
    • Strong foreign demand, heightened by negative yields for growing share of G-10 sovereign debt
    • Productivity growth as proxy for real neutral rate
    • Available supply, i.e. marketable UST debt available to price-sensitive, non-official sector accounts
    • Medium-term inflation expectations
  • Yields should remain near record lows through 3Q -- with 10Y falling to 1.2%, 30Y to 1.9% -- then increase modestly in 4Q, 30Y to 2.10%
  • 2Y yield should end year around 0.6%, rise to 0.9% by mid-2017 as market prices in higher odds of Fed action
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Praveen Korapaty (Credit Suisse Group AG)

To de-activate this alert, click here

UUID: 7947283