Bad News Is Bad News
Bad news was just bad news on Thursday in the US.
A jump in jobless claims and an abysmal read on ISM manufacturing undercut risk sentiment and sent 10-year yields tumbling below 4%.
Three-handle 10s was a notable development, but shorter tenors naturally rallied harder on Fed cut bets. Twos were ~18bps richer. The front-end's screaming at the Fed to cut, but to be fair, it's been that way for quite a while now.
The figure above's pretty ominous. It was ok when the data was holding up, but.
Curve will continue to steepen/uninvert, bull or bear. Hey remember the trump trade. Don’t hear much about that from the talking heads now huh?