BofA recommends going long in Treasuries, says easing inflation will see rates fall

News

On the recommendation, the firm cites expectations that easing inflation will cause rates to fall from here. From the report:

“While CPI inflation is 8.5%, we believe the market may be overemphasising inflation risks. Our forecasts point to inflation peaking this quarter and falling steadily into 2023. We believe this will reduce the panic level around inflation and allow rates to decline.”

They recommend establishing a long position targeting 2.25% with a stop level of 3.10%.

It sounds like they are choosing the side of ‘peak inflation’ but the chart in itself is something to be wary about in my view:

BofA’s play is not quite as straightforward as it looks when you try to digest it from a technical perspective.

Articles You May Like

The USDCHF has fallen below the 100H MA, trendline support and swing area support @ 0.8956
Oil prices rise in thin pre-holiday trade
Yen Recovers Slightly on Japan’s Inflation and Verbal Intervention, But Dollar Remains Unstoppable
Sterling and Yen Underperform After BoE and BoJ
Oil prices stable on Monday as data offsets surplus concerns

Leave a Reply

Your email address will not be published. Required fields are marked *