Morgan Stanley say its lonely being bullish US Treasuries, advise to buy the dips

Morgan Stanley is bullish US bonds but would like clients to join them:

  • “They say it’s lonely at the top.”
  • “The same can be said for being bullish on bonds at the highs in yield. We stand alone, with conviction, telling investors to buy government bonds.”
  • “We continue to suggest investors adopt an overweight stance on government bond duration”
  • “Market extrapolation of strong growth into the long term via higher long-term real rates may not pan out, leaving the rise in long-end yields vulnerable to a correction.”

And technical analysts want to weigh in here? Double toppy supporting the MS view here?

This chart is of US 10 year yields, weekly candles.Yields are inverse to price in bonds (just maths).

ps The most attention to MS was paid to their Tesla call:

This article was written by Eamonn Sheridan at Source