Morgan Stanley Says US Rate To Stay at 3.12%

The benchmark 10-year Treasury note yield has peaked for 2018 as trade worries, weaker emerging markets and a strong dollar cap the prior move upward in rates, according to Morgan Stanley.

“We started to take note of a changing dynamic for global government bond markets in late April and early May,” global head of interest-rate strategy Matthew Hornbach said in a note to clients Friday. “Not only do we think these factors will continue for a while longer, but we also think other factors will drive government bond yields lower.”

“That’s right, 3.12 percent was it,” he added, referring to the 2018 peak in the 10-year Treasury yield hit in mid-May. The 10-year yield fell sharply since then, last seen under 2.9 percent as a renewed wave of trade tensions gripped markets and threatened to stall global economic growth. Yields fall as prices rise.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza