Salient to Investors:

  • 10-yr T-notes are at the widest yield gap, 0.89%, to their G-7 counterparts since June 2007.
  • Charles Comiskey at Bank of Nova Scotia said people are being forced to buy Treasurys because both emerging-market currencies and stocks are getting hammered.
  • Adrian Miller at GMP Securities said investors are bullish on bonds and the 7-yr note in a sweet spot, insulated from Fed worries – globally US debt is looking attractive.
  • Sean Murphy at Societe Generale said peripheral countries make Treasuries look attractive.
  • Economists expect the 10-yr T- yields to rise to 2.78% by year-end. Futures indicate the odds the Fed will increase its benchmark rate by July 2015 have risen to 54%.
  • Michael Franzese at ED&F Man Capital Markets said the dollar is very attractive and the economy seems to be growing economy so higher rates are ahead – the majority of people are moving assets into the dollar.

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