Steepener Trade Gets Traction

Steepener in mainstream

The FT devoted a long article about the steepener trade. The headline was that Biden would cause long-dated bond yields to blow. Various authorities were quoted, including Paul Singer, Russell Clark, Dymon Capital, as well as an analyst at JPM.

This will not happen overnight, and it will not be a straight road, but the greater the expectation that yields will start to rise the more it will happen.


Generally risk on, based on expectations of stimulus. Pelosi & Mnuchin milking the suspense to maximize the expectations effect. Generally, everything green, except some EU markets. The ECB issued its own bonds, at a yield considerably higher than the German Treasury (although still negative). The success foreshadows increased activism, as promised by Lagarde recently.

Google may face some anti-competition charges in the US much along the lines they faced in the EU. It’s clear to me that they are abusing their position in search, especially on mobile.


Is anybody there?

I’m (sort of) thinking of setting up some sort of regular (but not daily) email based on the content of these posts. If you think you might possibly subscribe, drop me a line. I might just link my posts to social media somehow, instead. Does anyone have a view? In a related matter, I was half thinking of moving to Jekyll from Pelican, because of the superior github integration. Views?


Equities: pretty flat. Bonds: long yields definitely creeping up. Commodities: Crude down, nat. gas up, gold up, agriculturals mixed (beans and corn up).

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