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Commerzbank Relatively Sanguine Re: The Demand Outlook Over The Medium Term


Commerzbank note that “duration aversion still remains visible in U.S. Treasuries and the supply/demand mismatch remains the highest risk factor in view of the alarming long-term U.S. budget prospects.”

  • “A closer look at the budget metrics for the next couple of years and demand, however, reveals that supply should be manageable.”
  • “With fundamental value also attractive at yields close to 5% we thus do not expect funding pressure to push real yields and the term premium higher next year.”
  • “We still see no rush to scale into long duration positions but suggest using backups in yields to the highs seen earlier this month to increase duration.”
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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