Wonderful news if you work in fixed income currencies and commodities, and especially if you work in currencies or rates: 2010 is turning out to be a fairly good year after all.

First quarter global FICC revenues were $49bn according to Morgan Stanley, on a par with the record first quarter of 2009, and 94% higher than the fourth quarter of 2009.

Q1 FICC revenues are invariably high, so the real question is whether they were sustained in Q2, and whether they can be sustained during the remainder of the year.

Two analyst reports out this week suggest things are looking promising.

Firstly, analysts at SocGen have upgraded Deutsche Bank on the grounds that flow FICC businesses will be, “stronger for longer,” thanks to continuingly low interest rates.

Secondly, analysts at Bernstein Research in the US have issued a note saying that Q2 trading may be mixed (‘exceptionally strong’ in rates and FX, but more sketchy in corporate bonds, high yield, and emerging markets), but that widening credit spreads will create a return to the extremely profitable FICC conditions of 2009 by the autumn.

In particular, Bernstein is predicting that investors will decide that US Treasuries are risky after all. Once this realisation hits, and with interest rates still at zero, they’re predicting that investors will move into riskier fixed income assets, leading to higher flows and a reopening of the DCM issuance window.

All of this sounds promising for FICC bankers, and particularly those in rates and FX, where both hiring and bonuses are likely to be strong. Deutsche is rumoured to have recently poached Garry Naughton, a senior government bond trader from Goldman on a large package.

Last month, Johnson Associates predicted a 10% reduction in fixed income bonuses this year. Dire predictions may prove premature.