VIEW: Friday saw Goldman Sachs note that....>

US TSYS: VIEW: Friday saw Goldman Sachs note that "while US nominal yield curves

have steepened somewhat since the emergency rate cut in March, we believe there

is still substantial room for further steepening over the next year if our

baseline expectation for an economic recovery takes hold. We do not expect much

movement in the 2s5s portion of the curve, though we believe 5s30s nominal

curves, which have steepened 25-35bp since the emergency March cut, can steepen

an additional 40-50bp over the course of the next year. These yield curves have

steepened by an average of 95bp across the prior two cycles in the year

following the last rate cut, and differences between those recoveries and the

current recovery if anything suggest upside risk. While we like nominal curve

steepeners, we recommend adding 5s30s real yield curve steepeners as they offer

better entry levels and are likely to eventually steepen to a greater extent

than the nominal curve. The more attractive entry level is to some extent the

result of sharp declines in energy prices, which we think will start to reverse

later this year. So far, the real yield curve has steepened by 35bp since the

March cut, compared to an average of 135bp across the prior two cycles."