INSUBCONTINENT EXCLUSIVE:
New York: With the yield on US 10-year Treasuries surging to their highest level in nearly seven years, investors are starting to wonder
what will be the threshold triggering a big rotation out of equities and into bonds
Credit Suisse in Zurich, said in a phone interview
started yet, but should become visible when the yield reaches 3.2-3.3 per cent.
Bond yields have been advancing this year, lifted by robust
US economic data as well as by worries over a potential pick-up in inflation and the pace of US Federal Reserve rate increases
The move has rattled equity markets, in particular sectors seen as bond proxies such as telecoms and utilities.
While most investors expect
suggesting yields are heading toward 4 per cent
According to the latest fund manager survey from Bank of America-Merrill Lynch, asset managers are waiting for the yield to hit 3.6 per cent
months as investor focus is set to shift toward risks such as the US fiscal deficit
This should limit the upside in the yield to around 3.2 per cent this year, while the US dollar should fall back.
