Flattener

Morgan Stanley Expects A "Completely Flat" Yield Curve In 10 Months

"As the Fed hikes in December and then three more times in 2018, 2yr rates rise while 10yr and 30yr rates fall as bond investors grow worried about the effects of Fed tightening and skeptical that they'll be able to deliver more of it. By 3Q18, we forecast a flat 2s10s Treasury curve and a significant rally in 30yr rates."

"One Simple Reason The Yield Curve Is Collapsing"

The divergence between the 'hope' melt-up in stock markets and the 'nope' collapse of the US Treasury yield curve has never been so wide... and has never engendered so many excuses by commission-takers and asset-gatherers for why the latter is wrong and the former correct.

The Scariest Forecast For Treasury Bulls

Assuming Deutsche Bank is correct, the result would be the scariest forecast bond bulls have seen in years: a 10-Year TSY whose yield fades all gains attained during the past decade, in the span of just two short years, hitting 4.5% in early 2019. The adverse implications from such a fast, steep move on all asset classes, not just bonds, would be devastating.

Here Are The "Costanza Trades" Of 2017

Ask yourself; what are the trades that make complete sense and all your instincts say are right, and then do the opposite.  Basically what you end up constructing is an out of consensus portfolio and we all know how consensus trades work out in this market.

Calm Before The Storm - Coming Out Of The Voldrums

Implied volatilities - the market's best guess at short-term-future uncertainty - collapsed last week across every asset class from FX to equity. For now, as Bloomberg's Richard Breslow notes, markets seem comfortably calm amid the real storm of macro, micro, and geopolitical risks, but many of the same 'calm' markets are at critical technical levels putting them all "in play."