US Yields Will Go Much Higher Next Year: 3-Minutes MLIV

Summary

Mark Cudmore argues that US yields will rise significantly regardless of the CPI print, seeing 5% 10-year yields as a floor next year and 30-year yields breaking 6%. He attributes this to strong global growth, massive fiscal and private spending. He also turns bullish on the UK, citing strong global growth and data showing the UK reclaiming the fifth spot in global GDP.

• US CPI day expected to have a low print but asymmetric reaction if it surprises higher.
• Treasury backdrop called treacherous and negative irrespective of the CPI number.
• US yields forecast to climb a lot higher; 10-year yield floor at 5% next year.
• 30-year yields expected to break 6% next year.
• Strong global growth, high fiscal expenditure and private sector spending driving the yield call.
• Mark Cudmore reveals a bullish turn on the UK, pointing to World Bank figures showing the UK reclaiming fifth global GDP spot.
• Consensus World GDP forecasts seen too pessimistic and in need of upgrades.