The belief among some investors that easing may simply be delayed is borne out in the shape of the Treasury yield curve, says BNP Paribas SA head of G-10 rates strategy, Shahid Ladha. A sell-off at the front of the curve, on dimmed expectations for easing, has pushed it flatter. And buying in long-dated Treasuries has contributed to the move. That buying, Ladha said, reflects a pretty strong suspicion that while further cuts may not be imminent, they’ll have to be made.

“Even if it takes a little longer for the Fed to deliver the next cut, the long end remains convinced it is coming,” Ladha said.

--With assistance from Edward Bolingbroke.

This article was provided by Bloomberg News.

First « 1 2 » Next