DM rates: As you debate the macro, don’t forget the micro

As developed market rates stay elevated following the Q2 selloff, the macro arguments for both higher (better DM growth data, Greece resolution, approaching Fed hike) and lower yields (declining oil prices, stronger dollar, more aggressive ECB) have been well debated and established.

"A less advertised point is that we have now entered some of the strongest seasonal patterns in global fixed income markets, both in terms of market moves and issuance dynamics. We believe these could play a critical role (possibly more so than in prior years), and keeps us tactically bullish relative to consensus on long-end yields in USTs and Bunds," says BofA Merrill Lynch.