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BofA: Confidence Building For Duration Longs, Recommend Long 5s

US TSYS

Bank of America note that “in mid-February we stressed “patience on adding duration until 10y UST 4.50%+ & total Fed cuts over the cycle closer to 150bp or less.” We are now at levels where we believe investors can more confidently add duration exposure and recommend going long 5-Year Tsys at 4.62% targeting 4.00%, with a stop set at 5.10%.”

  • “Factors that make us more comfortable leaning long in the current environment: (1) The Fed is unlikely to hike again unless inflation expectations meaningfully rise (2) risk assets show increased sensitivity to rate moves (3) asset manager positioning is cleaner vs Q323.”
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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