Negative real yields on major sovereign debt here to stay – Reuters poll
The latest Reuters poll of over 100 fixed-income strategists showed that an era of negative real yields on major sovereign debt is here to stay, with the expectations for positive returns not on the table are a distant dream.
Key findings
“More than three-quarters of strategists, or 57 of 75 with a view, said the most likely path for sovereign yields would be to stay around current levels or be range-bound - not very far from this year’s lows and well below their pre-COVID-19 rates.”
“The US 10-year Treasury yield was forecast to rise over 25 basis points to 0.93% in a year, about half the expected average inflation rate, suggesting negative real returns over the coming year.”
“Nearly 80% of strategists, or 35 of 45 with a view, said the Fed’s promise of near-zero interest rates for several years would keep major government bond yields “low. Only about 20% of respondents said it would “not stop them from drifting higher.”
“But over 50% of 37 strategists with a view said emerging economies’ government debt was most at risk of a sell-off over the coming year.”
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Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
