Bonds go boom as banks go bust


Increasingly, this is looking like an end-of-cycle shock as a bull-steepening trade overtakes the bond market. This is most pronounced in the US where the two-year yield is crashing a lot faster than longer durations:

Thus the curve is steepening sharply:

In Australia it is similar though much more muted because we never inverted at the long end:


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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.