The benchmark 10-year Treasury note yield has peaked for 2018 as trade worries, weaker emerging markets and a strong dollar cap the prior move upward in rates, according to Morgan Stanley.
“We started to take note of a changing dynamic for global government bond markets in late April and early May,” global head of interest-rate strategy Matthew Hornbach said in a note to clients Friday. “Not only do we think these factors will continue for a while longer, but we also think other factors will drive government bond yields lower.”
“That’s right, 3.12 percent was it,” he added, referring to the 2018 peak in the 10-year Treasury yield hit in mid-May. The 10-year yield fell sharply since then, last seen under 2.9 percent as a renewed wave of trade tensions gripped markets and threatened to stall global economic growth. Yields fall as prices rise.