HSBC ups year-end US10 years Treasury yield forecast to 1.9pc

LONDON: HSBC said on Wednesday it raised its year-end forecast for US 10-year Treasury yields by 30 basis points to 1.9 percent as global constraints on US interest rate normalisation recede.

The bank said in a note to clients the new forecast was a tweak and not a change of view and remained below market consensus because the US economy was not strong enough to take much tighter credit.

HSBC's forecast compares with a current 10-year yield of 2.16 percent.

"Our view was and remains that the late cycle, over-indebted US economy cannot take significantly higher yields. It also recognises the role of stubbornly low rates in Europe and Japan."

HSBC saw 10-year yields at 2.3 percent at the end of 2018.