Capital Economics' APAC markets head Thomas Mathews said in a note the recent US
Treasury rally that pushed yields lower is likely to lose momentum and German
bunds may rally further. He said Treasuries face key tests this week: one
rationale for Fed rate cuts is protecting the labor market, but labor-market
momentum has strengthened and he expects the US June jobs report due later this
week to be strong again; it's increasingly clear labor conditions will not be a
reason to delay tightening, which he flagged as perhaps the biggest near-term
risk to Treasuries, though not the only one.
