The US curve narrative: we are slowly moving away from the potential inversion that pre cursored GFC in 2008. The 10 year has finally got a grip as it punches through 2.7% and the expectation for the belly is higher. So USD follow ? Not so fast – deferential traders are still in pain. And it hurts.   Two things to keep in mind: 30 year has nudged a little up at 3% BUT the spread between 2s and 10s is still rubbish as it flirts to .6% – 1.5% being the post GFC “normal” what ever that means.  QT IS or IS NOT the cause. I don’t know, or care right now. It is FAR too early to say.  Equity flows continue to take over yield hungry carry trades – in my book anyway. I see nothing changing but trouble ahead. The Wolf cites mortgage problems ahead and i concur.  So the big question is do i see USD higher or lower? Please don’t get annoyed but i see it a bit higher then much lower as 2018 wraps. LOL

Um, Is the US Treasury “Yield Curve” Steepening or Flattening?

 

Patrick Reid

Patrick Reid

Swapped the TV screens for the trading screens.
Philosophy: "Define your risk, only then can you ignore it"

Read how Patrick got into trading here
Patrick Reid

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