Yields on US bonds are expected to rise more gradually during the second quarter, with the risk of a short-term pullback high in the first part of the quarter, Credit Suisse analysts warn. They expect US 10-year bond yields to rise to 1.82% during the second quarter and 1.96 / 2.00% later in the year.
Key statements:
“The market enters the second quarter with short-term momentum diminishing slightly and medium-term momentum remaining at levels that are typically consistent with a pause. Therefore, we expect to see a more moderate upward movement during the second quarter, with the high risk of a short-term correction ”.
“The next major support zone at 1.82% is likely to be a tough barrier during the second quarter.”
“Longer term, we recently raised our central medium-term target to 1,965 / 2.00%, however we believe this level is less likely to be reached during the second quarter.”
“Resistance to a pullback is seen at 1.475 / 46%, which is likely to be a solid barrier to the downside. While it is not our base case, the next level beyond here is seen at 1,385%. “
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