Bond traders are gearing up for a risky trade strategy as slowing economies prompt central banks to cut interest rates, leading to a potential return to a more normal shape of the yield curve. The recent rise in U.S. and European 10-year bond yields compared to shorter-dated yields has reignited interest in 'steepening trades', where traders bet on shorter-dated yields falling relative to longer-dated yields.
The shape of the yield curve has been in the spotlight over the last week, with U.S. and European 10-year bond yields rising sharply compared to their shorter-dated peers.
"Everyone is now re-looking at these curve trades," said Olivier De Larouziere, chief investment officer for global fixed income at BNP Paribas Asset Management. Those bets turned out to be wrong. The gap between two- and 10-year U.S. Treasury yields, for example, hit itsat the start of July at around -110 basis points, as inflation remained stubborn and investors braced for more rate hikes .
"As long as the ECB stays hawkish and continues to hike rates, it's a bit too soon to have a steepener at the very short end of the curve."
Deutschland Neuesten Nachrichten, Deutschland Schlagzeilen
Similar News:Sie können auch ähnliche Nachrichten wie diese lesen, die wir aus anderen Nachrichtenquellen gesammelt haben.
Bella Hadid posts emotional update amid ‘painful' battle with Lyme diseaseBella Hadid is sharing an update on her health amid her treatment for Lyme disease: “As painful as this experience was, the outcome was the most enlightening experience of my life.”
Weiterlesen »
Treasury yields rise as traders absorb hawkish FedspeakBond yields rose on Monday after some hawkish Fedspeak over the weekend.
Weiterlesen »
Crypto Options Traders Are Still Shorting Bitcoin Volatility'Given the absence of big news in August, selling volatility and taking a vacation for solid theta gains is the only thing I can do right now,' one trader said. Crypto traders typically short volatility by selling, or writing, call or put options.
Weiterlesen »
DOGE Entry Zone Suggested by Trading Expert as Price Fails to Breach $0.07 This WeekendEntry zone for $DOGE named by a prominent analyst as he expects the price to soar. Dogecoin
Weiterlesen »
USD/MXN edges high following last week’s mixed US NFP, traders eye US CPIUSD/MXN recovers some ground on Monday, still trading off the day’s highs of 17.1505, and holds above its opening price by 0.03%. At the time of writi
Weiterlesen »
Report: Cryptopunks and Blue Chips Power Top NFT Traders to Over $300 Million in ProfitsThe latest NFT analysis details that the top gainers in the NonFungibleToken arena have earned between $3.3 million and $101.6 million individually.
Weiterlesen »