J.P.Morgan Remain Neutral On Duration, Maintain 2-/10-Year Flatteners

J.P.Morgan note that “yields remain somewhat high relative to their fundamental drivers and could provide near-term support for the intermediate sector. However, we remain neutral on duration as the resiliency of labor market data suggests that the Fed is unlikely to deviate from the expected path for monetary policy.”

• “Moreover, some of the key sources of demand for Treasuries in recent years are currently absent from the market and unlikely to return soon. Meanwhile, the curve remains somewhat steep relative to its drivers and tightening cycle dynamics support further flattening: we recommend holding 2s/10s flatteners.”