Good Information below in regards to the 10 year treasury: The TellThe Markets News and Analysis Blog Treasury yields will fall back to earth, strategists say September 24, 2013, 11:35 AM .With Treasury prices on track to gain for a ninth trading day in 10 sessions, the selloff that gripped the government debt market over the past four months may be starting to abate. HSBC Global Research strategists believe the 10-year Treasury note /quotes/zigman/4868283/delayed 10_YEAR -1.52%yield, which moves inversely to price, is poised to retrace its rise, falling to 2.1% in the next 12 months. Others agree, especially as the time frame for a Federal Reserve cut to its $85 billion in monthly bond buys gets pushed out, and as a fight over the federal budget heats up. Both are a boon to Treasurys. Andrew Wilkinson, chief economic strategist at Miller Tabak & Co., wrote in a Tuesday report that the 10-year note yield could cut in half its 1 percentage point rise between May and the beginning of September. That would put the yield at 2.50%, down 50 basis points from its peak of just about 3% earlier in the month. Barclays cut its year-end target on the benchmark note to 2.85% last week, down 25 basis points from its previous forecast. It’s no secret that the Treasury market has a “gravitational pull” on other asset classes and the move lower in yields “should have a sizeable impact on the entire financial landscape,” said the HSBC strategists, led by Fredrik Nerbrand, global head of asset allocation. In a Monday report, they outlined how other global markets may gain as a result: “We find that, during previous periods following a sharp rise in yields, fixed-income assets with greater economic exposure, such as credit and EM debt, tend to outperform. We also find that the USD tends to depreciate, and that commodities, and oil in particular, strengthen. “As a result, we continue to hold 36% of our portfolio in nominal U.S. Treasurys. We also adjust the composition of our fixed-income allocation by moving out of cash and TIPS (inflation is not an issue at this point), and into EM hard- and local-currency debt, where the selloff has been aggressive in comparison to previous bond routs. In addition, we add to our high-yield and oil positions in order to take advantage of continued strong liquidity flows.”
Posted on: Tue, 24 Sep 2013 16:34:18 +0000
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