21 Jul 2015
US-German 10-year differential to widen 200 bp by end-2016 – Goldman Sachs
FXStreet (Mumbai) - Investment bank Goldman Sachs, in its second half outlook, highlights the possibility of the 10-year rate differential between US and German bonds to widen to around 200 bp by end-2016.
Key Quotes
“We expect a widening to around 200 bp by end-2016 (well above the post-1990s average) driven by a combination of diverging monetary policy, inflation, GDP growth and the countries’ fiscal positions.”
“Over the near term, we do not have a strong preference between German and US 10-year bonds. However, on a 12-month view, we think US Treasury bonds are likely to under perform and expect the 10-year rate differential to widen.”
Key Quotes
“We expect a widening to around 200 bp by end-2016 (well above the post-1990s average) driven by a combination of diverging monetary policy, inflation, GDP growth and the countries’ fiscal positions.”
“Over the near term, we do not have a strong preference between German and US 10-year bonds. However, on a 12-month view, we think US Treasury bonds are likely to under perform and expect the 10-year rate differential to widen.”