US Rates: Fall in optimism might be a selling opportunity – BNPP
|Analysts at BNP Paribas continue to expect higher rates in 2017 and welcome the fall in rates as an opportunity to reset shorts.
Key Quotes
“Why?
- Global growth: Last November, we were expecting fiscal stimulus in the US to drive rates up. With stronger growth and inflation in the US and a simultaneous global upswing, we remain confident in our yield targets.
- Cleaner positioning: The most recent futures positioning data reveal that the market is still short, but less so than before the FOMC meeting.
- Balance sheet normalization: We continue to expect the FOMC to communicate its intentions and build momentum to lowering the size of its balance sheet by reducing reinvestments from early 2018.”
“In the short term, optimism surrounding Trump’s policy agenda appears to be fading. We are waiting for the 10y US Treasury to test 2.31% – a level it has resisted three times this year.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.