Over the coming weeks I will continue to post some of my (maybe controversial) 2020 predictions.
US Yield Curve (10y-3mo).
Next few weeks: up to +60bps
1q/2q pullback to maybe 0bps
Rest of 2020: rapid rise +200bps
US Yield Curve (10y-3mo).
Next few weeks: up to +60bps
1q/2q pullback to maybe 0bps
Rest of 2020: rapid rise +200bps
Comentarios:
Quick update on US yield curve
No change to longer term views expressed going back to q3/q4 last year
Wave 1 up prior to Christmas (steepening from Aug 2019 lows)
Wave 2 retraced 61/5 (further than my 50% anticipation)
Wave 3 up has started = looking for minimum +130bps in coming months, supercharged by FED easing in the short end as risk assets sell off
No change to longer term views expressed going back to q3/q4 last year
Wave 1 up prior to Christmas (steepening from Aug 2019 lows)
Wave 2 retraced 61/5 (further than my 50% anticipation)
Wave 3 up has started = looking for minimum +130bps in coming months, supercharged by FED easing in the short end as risk assets sell off
Comentarios:
Well on its way. FED are going to slash and burn short rates the next few months. Most likely short rates go to ZERO (yes ZERO) by the summer. No way bonds can follow that so expect rapid yield curve steepening to 50-75bps and then higher after that to +130bps (probably 2021 but could happen a lot sooner)
Comentarios:
Waiting on the FED next week to push the curve higher over +40bps (maybe with new issuance also to fund Coronavirus response)....still looking for huge steepening rest of 2020
Comentarios:
Curve now 54bps and rising
Comentarios:
Curve now 62bps and rising, expect first target 71bps next week, en route to 128bps in coming months
Comentarios:
Markets are in fast forward mode currently - everything happening at 4x speed
Spread now up to 92bps with US10yr closing above 1%
Next tgt around 130bps
Spread now up to 92bps with US10yr closing above 1%
Next tgt around 130bps
Didn't make it to +60bps in December (low 40s) and pullback therefore dipped below 0bps (slightly neg). Therefore in the coming wave c/3 in 2020 we my only see a rise in the curve to 150bps as a more conservative target. Starting imminently imo as FED looks to slash short rates to prop up the financial markets in the face of Coronavirus risks (which were non existent in Q3 2019 when I first posited about a curve reacceleration higher.