Matthew.Hornbach@morganstanley.comGuneet.Dhingra@morganstanley.comTony.Small@morganstanley.comSam.Elprince@morganstanley.comDavid.G.Harris@morganstanley.comShreya.Chander@morganstanley.comRobert.J.Brown@morganstanley.comKoichi.Sugisaki@morganstanleymufg.comShoki.Omori@morganstanleymufg.comMORGANSTANLEY&CO.LLCMatthewHornbachSTRATEGIST+1212761-1837GuneetDhingra,CFASTRATEGIST+1212761-1445TonySmallSTRATEGIST+1212296-5876SamElprinceSTRATEGIST+1212761-9491DavidHarrisSTRATEGIST+1212761-0087MORGANSTANLEY&CO.INTERNATIONALPLC+ShreyaChanderSTRATEGIST+44207425-4740RobertJBrownSTRATEGIST+44207425-4638MORGANSTANLEYMUFGSECURITIESCO.,LTD.+KoichiSugisakiSTRATEGIST+8136836-8428ShokiOmoriSTRATEGIST+8136836-5466Pleaseclickhereifyouwouldliketoreceiveourdailyinterestratemarketcommentary:theTreasuryMarketCommentary.GlobalInterestRateStrategistGlobalInterestRateStrategist||GlobalGlobalBuyThisDipThesmallbreakouthigherinyieldsonthebackofnascentimprovementinglobalgrowthisprovidingyetanotheropportunityforinvestorstobuythedipinUSduration.Ifglobalgrowthdoescontinuetodriverateshigher,wethinktheUSwillstillwinanotherroundintheRyderCup.DurationandCurvesIntheUS,wecontinuetosuggestselling2ynotesvs.buying5ynotes,notionalneutral.IntheeuroareaandUK,wecontinuetosuggestexpressingadurationunderweightagainstadurationoverweightintheUSandCanada.InJapan,wemovefrombullishtoneutralondurationtactically,butcontinuetosuggestaJGB20s40sflattener.SovereignsIntheUS,weattributetherecentriseinTreasuryyieldstoimprovementinoutlookforglobalgrowth.Atthesametime,theFedwillnotignore–andneithershouldtheTreasurymarket–continuedweaknessinUSeconomicdata.Should10yTreasuryyieldsmovetoward2.80%,wewouldlooktobuythemoutright.Inthemeantime,wecontinuetosuggestmaintainingshort2ynotesvs.long5ynotes,notionalneutral.InflationIntheUS,evenascarryturnspositiveforthemonthofMarchaftertwostronglynegativemonths,wedonotexpectmuchsupportfromthischangeincarry.Ourbacktestshowsthatacarry-drivenstrategyhasn'tworkedwellrecently.Additionally,ouriBMIsco...
