Saxo Market Call Is everyone (including us) too bearish on US Treasuries?
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May 23, 2025 The discussion centers on whether the prevailing bearish sentiment towards US Treasuries is misguided. Experts delve into potential market squeezes ahead of a holiday weekend and their implications for the US dollar and gold. They also consider how rising Treasury yields, legislative actions, and geopolitical tensions could affect investor sentiment and market dynamics. This contrarian perspective challenges common beliefs about bond investments and explores possible future scenarios.
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Overbearish Consensus in US Treasuries
- The US Treasury market has intense bearish consensus, pushing yields to key levels like 4.5% on the 10-year bond.
- This consensus might be overdone, potentially setting up a painful bond rally squeeze.
Potential Bond Rally Before Holiday
- A bond rally could happen ahead of the US and UK long holiday weekend, causing unexpected market impacts.
- This could affect the US dollar and gold, showing interlinked market dynamics.
US Treasury Rally and Dollar Impact
- A US Treasury rally could shore up markets but may not strengthen the US dollar as many assume.
- Dollar-yen bears might prefer lower US yields to aid both Japanese bonds and currency.