Greece debt problem is a positive backdrop for the US bonds outlook

BONDS

The last month or so has seen US Treasury yields fall across the curve, with longer-term rates declining more than their short-term counterparts.

While economic data has been positive overall and first-quarter corporate earnings often surprised on the upside, concerns regarding the debt crisis in Greece and uncertainties surrounding the SEC’s suit against Goldman Sachs triggered increased demand for US Treasuries, especially towards the end of April. Against this background, our outlook for US bonds is positive for the months ahead and, in particular, for spread sectors. Compared to the trough of the recession a year ago when GDP contracted 6.4%, the economy has made great strides during the last two calendar quarters. Against...