11 Jul 2013
Flash: Short-term 10-year US treasury range estimated at 2.5-2.8% – NAB
FXstreet.com (New York) - According to the NAB Research Team, “With NFP payrolls out of the way bond markets are now seen to settle into a range ahead of the next employment report and FOMC meeting in 3 weeks time.”
The 10-year Treasury note is currently yielding 2.63% and the short-term range is seen to be 2.50% to 2.80%. “Ultimately though we see 10-year Treasury note up at 3.00% before tapering begins. Closer to home, following the weak NAB business survey, NAB has brought forward its rate cut call for Australia to August.” the team adds.
It is not a done deal though and we wait for Thursday’s employment report and Q2 CPI (out on 24th July). Ultimately though the yield curve will continue to steepen and we see futures curve out at 120bps and 3y-10y swap curve at 140bps. In New Zealand, short-end pricing is now aligned with BNZ’s view of 75bps of OCR hikes in the year ahead, starting from March next year. While we see higher short-end yields by year-end we would not be surprised to see some receiving interest in the near-term, motivated by notable carry and roll benefits.
The 10-year Treasury note is currently yielding 2.63% and the short-term range is seen to be 2.50% to 2.80%. “Ultimately though we see 10-year Treasury note up at 3.00% before tapering begins. Closer to home, following the weak NAB business survey, NAB has brought forward its rate cut call for Australia to August.” the team adds.
It is not a done deal though and we wait for Thursday’s employment report and Q2 CPI (out on 24th July). Ultimately though the yield curve will continue to steepen and we see futures curve out at 120bps and 3y-10y swap curve at 140bps. In New Zealand, short-end pricing is now aligned with BNZ’s view of 75bps of OCR hikes in the year ahead, starting from March next year. While we see higher short-end yields by year-end we would not be surprised to see some receiving interest in the near-term, motivated by notable carry and roll benefits.