For Bond Dealers, It's Not Too Soon to Lower 2016 Treasury Calls
- Dealers change calls amid volatility, tepid economic growth
- Deutsche Bank sees 10-year yield falling to 1.75% in 2016
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Less than three weeks into the new year, two of Wall Street’s biggest bond dealers are already dialing back the 2016 Treasury yield calls they made at the end of 2015.
JPMorgan Chase & Co. and Deutsche Bank AG reduced forecasts for 10-year yields at the end of last week, wagering the Federal Reserve won’t raise interest rates as many times as policy makers expect. The banks, among the 22 primary dealers that trade with the Fed, say pressures will build amid the depreciation of China’s currency, slowing global economic growth, investor flight from risky assets and a dimming inflation outlook.