Yield Curve
Monetary policy surprises shape curve trade returns. We show where steepeners and flatteners offer the best risk-reward in today’s market.
The BoC held rates at 2.75% for a third consecutive meeting, but a weak growth outlook and contained inflation reinforce our overweight in Canadian bonds. With policy within the 2.25%–3.25% neutral range, the BoC remains comfortable waiting for clarity…
Investors should anticipate above average Treasury returns during the next 12 months, and curve steepeners will continue to profit.
We discuss the implications of this morning’s CPI report and the relative attractiveness of 2/5 Treasury curve steepeners.
The Treasury/OIS spread has exerted notable upward pressure on Treasury yields during the past year, but the factors driving the spread are now turning more favorable.
According to our fixed income strategists, the main drivers of rising global yields have been widening bond/OIS spreads and term premiums. Wider government bond/OIS spreads reflect increasing government bond supply (net of central bank purchases) among…
We perform a decomposition of yields moves across six major developed government bond markets to get to the bottom of what’s been driving the global bond selloff of the past eight months.