Analysis As U S Treasuries tumble some investors say turning point is near Anv - Erep HEAD TOPICS

Analysis As U S Treasuries tumble some investors say turning point is near

10/21/2022 10:01:00 AM

Analysis As U S Treasuries tumble some investors say turning point is near

Anv Erep

Source

Reuters

Analysis As U S Treasuries tumble some investors say turning point is near Some investors believe Treasury yields are close to peaking, even as markets continue pricing in more hawkishness from a Fed eral Reserve bent on taming the worst inflation in decades. Register now for FREE unlimited access to Reuters.comYet some investors see the Treasury selloff nearing an end, believing the Fed will slow the pace of its increases next year as inflation ebbs or the economy falls into a recession.Others think higher yields will soon start luring investors into Treasuries. Joachim Fels, a managing director and global economic advisor at U.S. bond giant PIMCO, recently wrote that markets have already priced in future rate increases and “absolute yield levels appear much more attractive than they have for a long time.” Read more:
Reuters » Dollar gains with Treasury yields, sterling tumbles on hot inflation By Reuters Vanguard ‘not confident’ U.S. Treasury rates have peaked after painful bond-market losses. Why ‘risk-reward profiles’ still appear more attractive across fixed income Treasury yields climb as recession fears spread US Dollar Forecast: DXY Index Consolidation Continues as USD/JPY Breaks Above 150

US home sales fall for 8th month in a row in September the longest slump since 2007 CNN Business

Home sales in the US declined for the eighth month in a row in September as surging mortgage rates and high prices pushed buyers out of the market. Read more >> Dollar gains with Treasury yields, sterling tumbles on hot inflation By Reuters*U.S. DOLLAR JUMPS AS TREASURY YIELDS SOAR TO 14-YEAR HIGHS - $USD 🇺🇸🇺🇸 mohsin2908 kindly note This guy must be enjoying this year 2022 The rise is minimal Vanguard ‘not confident’ U.S. Treasury rates have peaked after painful bond-market losses. Why ‘risk-reward profiles’ still appear more attractive across fixed incomeU.S. Treasury rates may have yet to peak after surging this year, but higher yields have made bonds more attractive in tumultuous markets as investors face a... Treasury yields climb as recession fears spreadTreasury yields rose across the board on Wednesday as concerns over a recession spread among investors. Isn’t that an oxymoron And many will be buying today US Dollar Forecast: DXY Index Consolidation Continues as USD/JPY Breaks Above 150US Treasury yields continue to push higher, cushioning the US Dollar (via the DXY Index) from a more significant pullback. USD/JPY rates have reached a fresh yearly high, helping the DXY Index remain in its symmetrical triangle. Kicks Crew Teams With Damian Lillard for First Athlete Partnership.kickscrew is growing its position in the sneaker industry with its first athlete partnership with trailblazers point guard Dame_Lillard. dollar’s climb ..U.Treasury yields rose across the board on Wednesday as concerns over a recession spread among investors, and markets looked ahead to the release of housing market data. The tumble in bonds has intensified in recent days, as U.S. Treasury yields - which move inversely to prices - hit their highest levels since the 2008 global financial crisis on concerns that the Fed would need to raise rates more aggressively to bring down consumer prices. “It’s been tough being a fixed-income investor for the last few years,” with investors struggling a couple years ago to find yield as many parts of the bond market had negative rates, said Jeff Johnson, Vanguard’s head of fixed-income product, by phone. Register now for FREE unlimited access to Reuters.com Register Meanwhile, fed funds futures late Thursday priced peak U.4989%. S.. interest rates of 5% in May next year, up from bets this month that saw the rate at 4.4% by that time. Yet some investors see the Treasury selloff nearing an end, believing the Fed will slow the pace of its increases next year as inflation ebbs or the economy falls into a recession. Treasury rates may have yet to peak after surging this year, but higher yields have made bonds more attractive in tumultuous markets as investors face a likely recession next year, according to Vanguard Group. John Vail, chief global strategist at Nikko Asset Management, expects the Fed to raise rates by 150 basis points in total over the next two months, then start cutting rates in the first half of next year. A fourth consecutive 75 basis point rate hike is now widely expected from the central bank at their meeting in early November and Fed speakers have suggested that this trend could continue. “This forecast is dovish after January, which should provide major relief for equity and bond markets," he said. Others think higher yields will soon start luring investors into Treasuries.” Vanguard said in its active fixed-income perspectives report for the fourth quarter that “the most prudent approach is to focus on a core allocation to higher-quality securities that are less sensitive to a weakening global economy. Joachim Fels, a managing director and global economic advisor at U.S. bond giant PIMCO, recently wrote that markets have already priced in future rate increases and “absolute yield levels appear much more attractive than they have for a long time. Fundamentally, though, investment-grade corporate bonds would better withstand a recession than high-yield, or so-called junk, bonds, he said, adding that Vanguard also prefers moving up in quality within high-yield debt. This could give traders further insights into the state of the U. ” FED Benchmark 10-year yields were at 4.23% late Thursday while two-year yields were at 4.61%, presenting a more alluring picture for income-seeking investors compared with the beginning of the year, when those yields stood at 1. Elevated market volatility has meant “more dispersion and better entry points in select lower-quality bonds,” providing a potential complement to a core allocation to higher-quality securities, according to the report.5% and 0.7% , respectively. Among those espousing the view of a coming peak in yields is DoubleLine Capital chief executive Jeffrey Gundlach, who on Thursday tweeted that there are “signs of yield increase exhaustion.2% this year through Oct. Treasury yields may well be peaking between now and year-end.” loading Fund managers in a recent BofA Global Research survey, meanwhile, are the most bullish on long term bond yields since November 2008, with 38% expecting lower long-term rates in the next 12 months. Vanguard, the world’s second-largest asset manager, last month told Reuters that U.7% loss for the Vanguard Core Bond Fund Admiral Shares VCOBX , which actively invests mainly across the U.S. Treasuries are near the end of a painful decline. Nascent Treasury bulls also point out that many yields are very close to where the Fed has said it believes interest rates will end up next year. Read: Why Vanguard likes U. Some investors have been more hesitant to call a peak, citing the Fed’s single-minded focus on bringing down consumer prices, which have proven far more stubborn than many expected this year. "With inflation so high and still rising, it would be a mistake to assume that central banks will pivot to easing if something indeed breaks," BoFA’s strategists wrote. "Depending on where they are in their tightening cycle, they may not even pause. But that’s probably not where they’re going to remain invested for a long period, as sitting in cash, money markets, and ultra-short bonds is unlikely to meet return expectations required by many investors over the long term, he said. " The Fed has raised rates by 300 basis points so far this year. Fed funds futures traders are pricing in a 95% chance of a 75 basis points hike at the central bank's Nov. 2 meeting, with Fed Chairman Jerome Powell's views on inflation and the economy seen as the next potential catalyst for yield moves. The yield on the 10-year Treasury note TMUBMUSD10Y jumped 13. Futures show traders pricing in a 75% probability of another 75 bps hike in December, according to CME Group data. Zhiwei Ren, managing director and portfolio manager at Penn Mutual Asset Management, believes yields may subside if the economy enters a recession. But he said persistent labor shortages, broken supply chains and other long-term changes in the global economy are likely to keep inflation elevated.m. “Just three months ago I was thinking 3.5% was a great level for the 10-year,” he said. “Now I think the 10-year could go to 5% or even higher over the next few years.550% for their highest level since Aug.” Register now for FREE unlimited access to Reuters. com Register Reporting by Davide Barbuscia; Editing by Ira Iosebashvili and Gerry Doyle Our Standards: .