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Why Deutsche Bank says it’s time to short the 10-year Treasury - MarketWatch

1. Deutsche Bank believes market overestimates interest rate cuts potential. 2. They added a short U.S. 10-year Treasury position anticipating rising yields. 3. Correlation between SOFR and 10-year Treasury yields remains strong despite recent fluctuations. 4. Market expects three more interest rate cuts from the Federal Reserve this year. 5. Futures suggest terminal interest rate around 3% in the next year.

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FAQ

Why Bearish?

The expectation of rising yields due to reduced rate cut bets can drive TMUBMUSD10Y lower. Historically, similar forecasts have led to declines in Treasury prices.

How important is it?

The article discusses key factors influencing U.S. Treasuries, directly impacting TMUBMUSD10Y's price dynamics.

Why Short Term?

The market adjustments based on Federal Reserve actions typically reflect in the short-term. Previous cycles show quick reactions to interest rate forecasts.

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