Singapore: Treasuries headed for their biggest back-to-back quarterly advance in almost five years. Economists say the gains may turn into losses.

The Bloomberg US. Treasury Bond Index has surged 5.5 per cent since the end of 2015, the most since the third and fourth quarters of 2011. The rally snowballed last week after the UK voted to leave the European Union, driving a rush for the safest assets.

JPMorgan Chase & Co, Standard Chartered Plc, TD Securities Ltd and Standard Bank Group Ltd., the four firms that have updated their Treasury forecasts since the referendum, all see 10-year yields rising a year from now. Standard Bank is calling for the biggest increase, to 1.85 per cent, versus 1.47 per cent Wednesday.

“Treasury prices are too high,” said Enna Li, a debt investor in Taipei at Mirae Asset Global Investments Co, which oversees $83 billion (Dh304.6 billion) worldwide. “I wouldn’t buy any. The US economy is still fine.”

Treasuries were little changed as of 1:15pm in Tokyo, giving up an initial 1/8-point gain, according to Bloomberg Bond Trader data. The price of the 1.625 per cent security due in May 2026 was 101 13/32.

US gross domestic product expanded at a 1.1 per cent annualised rate in the first quarter, compared with a previously estimated gain of 0.8 per cent, a Commerce Department report showed Tuesday in Washington.

Recession

Mirae’s Li said the figure shows the world’s biggest economy is performing well versus its peers. Britain’s decision to leave the EU has raised concern the UK will fall into a recession. In Japan, an inflation gauge monitored by the central bank is stuck below zero.

Federal Reserve Governor Jerome Powell said Tuesday global risks have shifted further to the downside after Britain’s vote to exit the European Union, introducing new uncertainties that may merit reassessing monetary policy.

The US is scheduled to report personal income and spending levels as well as an inflation index monitored by the Fed Wednesday. The monthly employment report July 8 will show the world’s biggest economy added 180,000 jobs in June, rebounding after a gain of 38,000 in May, based on a Bloomberg survey.