Bond yields are currently likely in the process of topping out – JP Morgan

Anil Panchal FXStreet

Analysts at JP Morgan highlight the recently sluggish Treasury bond performance while suggesting a pullback in the coupons as they said, “Bond yields are currently likely in the process of topping out.”

While citing the reasons, the investment bank stated that the disinflation phase had begun.

JP Morgan also mentioned that inflation would drop meaningfully lower in three to six months.

The US-based bank forecasts that core inflation will be at 5.3% YoY in the first quarter (Q1) of 2023, compared to the latest print of 6.6%.

It’s worth noting that the yields began the week on the positive side before marking a retreat as traders turn cautious ahead of the critical US Wednesday’s all-important Federal Open Market Committee (FOMC) meeting and Friday’s Nonfarm Payrolls (NFP). That said, the US 10-year Treasury yields remain sidelined near 4.05% by the press time.

Also read: Forex Today: Dollar strengthens ahead of RBA, Fed and more

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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