The rally in Treasurys has room to go and Charles Comiskey, head of Treasury trading at Bank of Nova Scotia, expects the 10-year yield to fall to as low as 1.68% in the short-term. Comiskey notes a "tremendous amount" of buying as the bond market shows similar pattern from past selloff -- higher yields bring in buyers on risk of a potential US fiscal cliff. Still, he says the Fed's stimulus will keep the bond market's strength in check. "The Fed is clearly committed to re-flating the economy, and you don't want to step in front of the Fed," he says. The 10-year is recently 15/32 higher in price to yield 1.784%.
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