The tides are moving against Treasury bonds, but bond yields could well fall again in the intermediate term, says Hicham Hajhamou, director of Treasury trading at Pierpont Securities. One potential support for bonds is the risk of the US fiscal cliff, which will come to the forefront of investor concerns as 2012 nears the finish line. "The 10-year yield could easily shoot up to 2% or even 2.5%, but it could also fall back to 1.5%," Hajhamou says. Even as global central banks are calming fears for now, he argues that the indebtedness of countries remains -- QE won't solve that. The 10-year note is 23/32 lower to yield 1.841%, highest in more than three weeks.
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