Demand from pension fund and insurers should be relatively firm. |
Given the trend of an aging population, especially in Japan, I would presume that the 30-year bond in particular should fetch decent prices. |
I suspect that economic data will put a downward bias on yields. |
It will compress consumer spending through negative wealth effect. |
Supply will be a greater factor pushing up yields. Investors won't be too keen to push yields any lower, even if economic data look positive for the market. |
The bias is for U.S. Treasury yields to trade modestly to the downside on risk-aversion shifts and the downside biases on U.S. economic releases this week. |
The Fed will probably go along with what the market has priced in to minimize volatility and any policy surprises. |
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We are pretty bullish on Treasuries. Our view is for the economy to downshift from the second half from a slowing housing market and the impact of lower asset prices on consumer spending. |
We are skeptical on the quick rise in yields as nothing has fundamentally changed in the past few weeks. The bias is for yields to go downward. |
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