Long-term interest rates, energy prices, the USD and Scandi FX have all rallied lately. However, a pullback is likely over the short-term. The massive rally in long-term yields continued with the US 10-Year Government yields closing in on 4.7% during the past few days before paring back to around 4.5%. Central bank’s message of higher rates for longer, robust economic data and bond supply-demand dynamics have all contributed to the rise in yields lately. While a move up to 5% cannot be ruled out, we believe that the upside from today’s levels is limited and see long-term yields trading around 4.0-4.5% longer-out. ... (full story)