The European economy points toward solid growth. We are looking for yields above 3.5 percent within a month.
The general assessment for the U.S. economy in 2006 is continued robust growth, at least at the same pace as in 2005. Ten-year yields are too low.
Since breaking 3.5 percent on the 10-year yield, we should have room to go much higher.
We believe the fundamentals are increasingly pointing toward bright economic developments in Europe. Current yields for European 10-year bonds are too low and should rise.
We are looking for another strong year for the U.S. economy. I would not put my money in the long end.
The Fed will hike at least once more, and there won't be a significant slowdown in the second half of the year. Yields could go some basis points higher from current levels.
The Fed minutes are very important, and the market is very sensitive to data today. Most likely, we will linger around the 5 percent level, in yield terms.
Europe's growth prospects are still intact and the ECB are being very firm about their hawkish stance. We will see yields rising gradually.
