As bond vigilantes know, you don’t mess around in fixed income; it comes for the quick and the dead. Yesterday the US Treasury yield curve flattened at its fastest pace since March, the spread between 2-year and 10-year Notes just 15 basis points. A snapshot as at yesterday’s close saw yields as follows: 2-YR 2.82 per cent; 3-YR 2.84 per cent; 5-YR 2.83 per cent; 10-YR 2.97 per cent and 30-YR 3.22 per cent. Yields on UK Gilts also fell suddenly on Monday, especially at the very long end which had got out of line in November.
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