UST 10Y Yield Can Rise 125bp to Narrow Term Premia: CrossBorder
Source: BFW (Bloomberg First Word)
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(Bloomberg) -- Real term premia 125bp too low, possibly signaling that UST 10Y yield can rise by same amount as to close gap over next 18 months, CrossBorder Capital writes in note.
Alert: HALISTER1- Inflation impact on bond yields are usually “slow-moving, persistent effects,” not the reason for current selloff
- Instead, liquidity and volatility factors are more explanatory; flight-to-safety move into Western government bonds now reversing as China liquidity rising on stabilizing economy
- PBOC stimulus “matters far, far more” than Trump policies for world commodity prices and bond yields
- “Real concern” is Chinese wholesale prices breaking out of 4-year deflationary period, possibly explaining rising net inflows back into China where profit expectations are higher
- Yield curve will inevitably steepen more as central banks take slow and measured pace to hike rates
- Related story: Easy PBOC Stance, Not Trump, Fueling Bond Selloff: CrossBorder
Source: BFW (Bloomberg First Word)
To de-activate this alert, click here
UUID: 7947283