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Analysts from TD Securities, extended their long 10-year US bond yield target from 1.60% to an all-time low of 1.35%.

Key Quotes:  

“Yields have resumed their march lower after weak German and Chinese data. While yesterday’s delay in tariffs on about half of the remaining $300bn of Chinese imports triggered a risk-on move, we don’t expect a deal this year. We have been long 10y Treasuries due to concerns about weakness in global growth and trade tensions,  and have previously extended the target.”

“We extend our long 10y target from 1.60% to an all-time low of 1.35%”:

“With the S&P just 4% off all-time highs, there is a risk of equity declines due to weak growth data or trade war intensification, exacerbating the safe-haven flows.”

“Upcoming Philly/Empire surveys should come in soft due to renewed trade uncertainty. Similarly, the Fed may have to sound more dovish at the JH conference if they want to backstop markets.”