Deutsche bank has said that the 10-year US Treasury yield is likely to hike by 4 per cent in the coming weeks, with markets currently over-hyped about the amount of reduction in rate, the Federal Reserve may deliver.
As inflation slows down and the labor market weakens, investors price in around 100 basis points of interest rate reduction from the Fed this year.
The 10-year Treasury yield, which affects the borrowing costs around the world, has fallen almost 40 basis points over the last month to 3.8 per cent.
The bank stated that a move to around 4.1 per cent in the coming weeks was likely.
Francis Yared, Deutsche bank’s global head of rates research recommends shorting 10-year US Treasuries, which necessarily implies that the bond price is expected to fall and yields rise.
Yared told Reuters on Wednesday that investors were too optimistic in pricing 100 bps of rate cuts, which implies a 50 bps cut at one meeting.
He reflected the…
As inflation slows down and the labor market weakens, investors price in around 100 basis points of interest rate reduction from the Fed this year.
The 10-year Treasury yield, which affects the borrowing costs around the world, has fallen almost 40 basis points over the last month to 3.8 per cent.
The bank stated that a move to around 4.1 per cent in the coming weeks was likely.
Francis Yared, Deutsche bank’s global head of rates research recommends shorting 10-year US Treasuries, which necessarily implies that the bond price is expected to fall and yields rise.
Yared told Reuters on Wednesday that investors were too optimistic in pricing 100 bps of rate cuts, which implies a 50 bps cut at one meeting.
He reflected the…
