CIBC World Markets Japan Inc. in Tokyo says the outlook for U.S. inflation makes nominal Treasuries unattractive.
The difference between yields on 10-year notes and similar-maturity TIPS, a gauge of trader expectations for consumer prices over the life of the debt, rose above 1.70 percentage points this week for the first time since May. Given the current 10-year yield, it means the notes only pay about five basis points after accounting for consumer prices, according to Kazuaki Oh’E, head of fixed income.
“I don’t want to buy here,” he said.
This article was provided by Bloomberg News.