Global Bonds Stumble, Yield Curve Steepens After Trump, BoJ

Following Trump comments on The Fed, rates, and currency manipulation and headlines about The BoJ shifting its policy, global bond markets hiccupped to the downside and yield curves steepened aggressively.

The bear-steepening move was initially fueled by a Trump tweet that tightening “hurts all that we have done” and extended after Reuters reports about the Bank of Japan modifying its yield curve target.

JGBs led the plunge…but Bunds and USTs followed.

US Treasury yields are spiking (especially the long-end)…

Steepening the yield curve aggressively. This is the biggest single-day steepening in the 2s30s curve since early February’s crash.

Treasury yields and stocks are catching up to each other…

All of which is interesting given that bond speculators are already at record shorts…

We do note that desk chatter also notes that rate-lock selling ahead of next week is potentially weighing on long end of curve, with earnings season underway and corporates poised to launch new issues.

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