VIEW: Tuesday saw Societe Generale note.....>

US TSYS: VIEW: Tuesday saw Societe Generale note that "the worst might be behind

us, with the economy having bottomed in March-April. But the path to recovery is

likely to be marred by volatile data prints... Amid extraordinary monetary &

fiscal stimulus, we see the risks asymmetrically skewed toward higher yields.

But with the Fed committed to keeping rates low, the rise in yields is likely to

be gradual. We expect the 10y yield to rise to 1.20% by mid-'21. Our bear case

is for 1.75%, and our bull case has the yield remaining in the 0.75-1% range. A

committed lower-for-longer Fed should keep front-end yields range-bound, while

long-end yields have room to rise on the prospect of a growth recovery and/or

additional fiscal spending. We maintain our structural curve steepening bias

over the long run but are cognisant that the move will likely be in stages and

predicated on continued improving sentiment. In our base case, we expect the

2s10s and 5s30s curves to steepen by 30-40bp. The Fed's focus on market clarity

should continue to dampen short-expiry swaption vols, while the prospect of a

normalisation in yields and steeper curves should be supportive of long-expiry

vols, which are already at historically depressed levels."