Sovereign bond yields to stay around current levels until end-2020 – Reuters poll

According to the latest Reuters poll, major sovereign bond yields are likely to hold the lower ground in the coming 12 months, in the wake of the economic fallout from the coronavirus pandemic.

Key findings

“The June 19-26 poll of more than 90 fixed-income strategists and analysts found government bond yields would stay around current levels until end-2020, rising marginally by this time next year.

A benign inflation outlook, which risks turning disinflationary or deflationary, also explains the subdued yields.

More than 70% of 45 analysts who answered a separate question said disinflation or deflation because of weaker demand was a greater risk after the pandemic subsides.

The remainder predicted higher inflation because of trade friction and shifting supply chains. Those results were similar to a Reuters poll of over 160 economists published last week.

Nearly two-thirds - 29 of 44 - of strategists who answered another additional question said the Fed will not introduce yield curve control this year. The remaining 15 said it would.”