As we mentioned earlier US bond yields are making fresh multi-week lows as they look through the short-term inflation data and in our opinion recognise two important factors:
- Longer dated US bond yields have been building in higher rates than are likely in the coming couple of years.
- The crowd has swung from bearish to bullish bond yields as reflation dominates the press, its time for these weak short term players to be washed out.
MM is bullish reflation longer term but we believe the opportunity to gain exposure to rising bond yields will improve over the coming weeks / months i.e. rates will track lower as the momentum traders get stopped out of their positions.
MM is a keen buyer of US 30-year bond yields under 2%
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