Yields Will Continue Rising, Janney Strategist LeBas Tells Bloomberg

Janney Chief Fixed Income Strategist Guy Lebas explained on Bloomberg today why his firm believes the yield will continue to move higher.
By Lindsay Rittenhouse ,

NEW YORK (TheStreet) -- The 10-year Treasury yield is beginning to bounce back Monday morning from its record low and will continue to do so, Janney Chief Fixed Income Strategist Guy LeBas said on "Bloomberg Go" today.

The 10-year yield is rising to around 1.4% today, after closing down at a record of 3.666% on Friday, despite the U.S. Labor Department delivering a strong jobs report.

The yield on the 10-year Treasury note initially went higher after news broke on Friday that the U.S. economy added 287,000 jobs in June, beating analysts' average expectations of 180,000 new positions. But the rally did not last and the yield ended at a record low.

"We think yields are going to be moving up a little bit higher," LeBas stated.

The primary reason for the decline in the yield was the "aftermath" of the Brexit vote, which pressured global markets due to the uncertainty surrounding Britain's decision to leave the European Union, LeBas explained.

However, "other measures of economic expectations have not deteriorated nearly as much as yields have fallen," he continued.

The entire "decline of yields" is referred to as "the real yields" and these losses only last "a matter of weeks," not months and "certainly not years," LeBas concluded.

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