10-year Treasury yields are now trading closer to the 4% mark and the Reuters poll of 62 bond strategists sees that yields should keep around 4.10% in three months’ time. Although the forecast is trimmed from the previous poll in December by about 15 bps, it does point to the thinking that the recent bounce in yields may hold for a while longer.
HSBC’s global head of fixed income research, Steven Major, argues that: “Our forecast is for yields to remain unchanged in the first three months; and while that may sound really boring, that’s how bonds work. I feel very strongly the next big move in yields is downwards and will come in the second half of the year because markets need to see actual moves from the central bank rather than working on pure expectations.”
The forecast from the rest of the pollsters show that 10-year yields are expected to be at around 3.93% by the end of June before falling further to 3.75% by year-end.