US Treasury Yield Movement and Standard Chartered's Outlook After $22 Billion Bond Auction
Following a recent $22 billion auction of US government bonds, which saw strong demand, the benchmark 10-year Treasury yield experienced volatility. Standard Chartered has become more optimistic, suggesting a long position in 10-year Treasuries, anticipating a retreat toward 4.75 to 5 per cent over the next year.
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According to the South China Morning Post, strong demand was observed during a US$22 billion auction of US government bonds last week, which occurred after Treasury yields had risen rapidly.
The benchmark 10-year Treasury yield climbed above 5.36 per cent on Wednesday, marking its highest level in 24 years. Subsequently, on Thursday, the yield decreased to approximately 5.23 per cent, a change attributed to robust demand during the US$22 billion auction of 30-year government bonds.
Standard Chartered has shifted to a more bullish stance, advising an opportunistic long position in 10-year Treasuries subsequent to yields surpassing 5 per cent. The bank projects that the 10-year yield may fall toward the range of 4.75 to 5 per cent within the subsequent six to 12 months. This projection is based on the bank's expectations regarding moderating inflation and a Federal Reserve tightening cycle that is anticipated to be less aggressive than current market expectations.
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