Barclays forecasts lower bond prices and higher yields for US Treasuries

Barclays are bearish US government bonds, citing multiple reasons to expect lower prices, higher yield, ahead:

  • recent rally is over stretched: “The rally over the last few weeks seems excessive and we recommend shorting 10y US Treasuries”
  • says bullishness on the US 10yr is “odd” given the barrage of strong economic data that suggests rates will remain higher for longer: “While the Fed still seems to be sticking to its baseline of cuts starting this year, the case for a meaningful easing cycle has weakened in our view raising the risk of the Fed forecasting a shallower easing cycle.”
  • adds that the few softer data points are misleading, analysts at Barclays say the risks are skewed toward the economy surprising to the upside
  • increase in supply of US Treasuries, the Federal Reserve trying to offload its government bond portfolio also suggest higher yields to come

This article was written by Eamonn Sheridan at Source