Credit Suisse research is on Twitter, and they just went wild, tweeting the case for a bear market in bonds.
$CS view: "We think we are entering a bear market for bonds" #BondBearMarket
- CS Research (@csresearch) March 4, 2015Using the hashtag #BondBearMarket, the firm fired out a series of tweets backing up its case, starting with the straightforward call that fair value for the US 10-year Treasury note is 2.75%, about 75 basis points above where that bond currently trades.
The firm also noted that 98% of the decline in bond yields since last spring were driven by declining inflation expectations - and expectations have currently ticked higher.
Here's the full rundown from Credit Suisse:
#BondBearMarket: Bond yields are overvalued; 2.75% is fair value for the US 10-year bond yield pic.twitter.com/DsZyOm46gL
- CS Research (@csresearch) March 4, 2015#BondBearMarket: There has been $1.3trn inflows into bonds since 2008 and nearly zero into equities pic.twitter.com/r5TY3pKkFN
- CS Research (@csresearch) March 4, 2015#BondBearMarket: 98% of the fall in bond yields since May 2014 has been driven by falling inflation expectations pic.twitter.com/lKuBBGX7oT
- CS Research (@csresearch) March 4, 2015#BondBearMarket: Inflation expectations have been falling, driven by lower oil prices, but have recently spiked pic.twitter.com/Y7yNRttlP0
- CS Research (@csresearch) March 4, 2015#BondBearMarket: Bonds are over-owned and duration risk appetite is still high pic.twitter.com/gHne9hYeIC
- CS Research (@csresearch) March 4, 2015#BondBearMarket: Global PMI new orders are correlated with the cyclical moves in bond yields; recovery started pic.twitter.com/HsFSvw9nwO
- CS Research (@csresearch) March 4, 2015#BondBearMarket: The spread of US Treasuries over German Bunds is at an all-time high pic.twitter.com/0McObXVPND
- CS Research (@csresearch) March 4, 2015#BondBearMarket: US 10-year bond yields are still close to the lowest level in 140 years pic.twitter.com/1mmFt0oJvF
- CS Research (@csresearch) March 4, 2015#BondBearMarket: The forward curve is more optimistic than the Fed dots #Fed, #FOMC, #Yellen pic.twitter.com/BwN4P2Qqu8
- CS Research (@csresearch) March 4, 2015#BondBearMarket: A rise in bond yields has historically been consistent with a rise in the S&P 500 pic.twitter.com/M7NYrG57Nq
- CS Research (@csresearch) March 4, 2015#BondBearMarket: Dollar bull market cycles have tended to last for 6-7 years; this compares to 3.5 yrs so far pic.twitter.com/nXvjM0fdBK
- CS Research (@csresearch) March 4, 2015#BondBearMarket: Tech traditionally outperforms when bond yields rise; Utilities & Beverages underperform pic.twitter.com/DGrGUWwbay
- CS Research (@csresearch) March 4, 2015