Research Roundup

December 26th, 2015 9:07 am | by John Jansen |

Attached is a Bloomberg story which summarizes the outlook of several dealers regarding the outlook for interest rates in 2016. One dealer looked for lower rates with the remainder looking for higher rates.

Via Bloomberg:

ESEARCH ROUNDUP: 2016 UST Rates and Supply Outlook
2015-12-23 15:30:00.0 GMT

By Monika Grabek
(Bloomberg) — (Adds DB, BNP, BofAML)

* Major banks’ outlook for UST rates and supply in 2016, from
published research:
* Barclays
* Market and Fed will remain divided in 2016; story link
* Favor 2s5s steepeners for early 2016; story link
* BNP Paribas
* “Rates across the curve are too low”; story link
* Bond markets “too complacent” about inflation; story
* BofAML
* Curve flatteners “unlikely to work” in 2016; on carry-
adjusted basis, 5s30 flattener has lost more than 50bp
YTD; story link
* Position for China currency risk in 2016; story link
* Credit Suisse
* Short UST 5Y is among top trades for 2016; story link
* UST yields will rise more than forwards imply; story
* UST long end may rally in 2016; story link
* Deutsche Bank
* “Baby tantrum” may send 10Y yield to 2.75%; story link
* Goldman Sachs
* UST 10Y yield likely to reach 2.75% by June; story link
* Morgan Stanley
* Yields will dip in 1Q then resume climb; 10Y yield will
end 2016 at 2.70%; story link
* Sell 2s outright or on curve in 2016; story link
* Nomura
* Long end “will move around a lot” in 2016; story link
* UST net coupon issuance to decline, mainly via cuts to
2Y and 3Y auction sizes; story link
* Rates are too low, curve is too flat; story link
* Buy UST 10Y if yield tops 3% in 2016; story link
* Societe Generale
* Higher yields, flatter curve likely in 2016; story link
* TD
* UST 5/30 curve to flatten before, after liftoff; story
* Wells Fargo
* Front-end yields should rise over next several months;
story link

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