US 10-year yield target lowered to record low – TDS

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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.”
 

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