Forex - US Bond Flows: steepener trades winning out

 16:23 (GMT) 14 Mar

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Not particularly clear what is motivating the action, if indeed anything specific, but it does seem like steepener trades are continuing to find favour as 30s lead a quick blip higher in US yields after early day resilience. All the various spreads to 30s out to new highs including 2s30s above the recent 57bp wides. Inability of 30s to push below 3% and filling of demand through the auction yesterday perhaps playing to the action, while in general the view that the Fed pause this year is supportive has been playing to the trend pick up on the curve. It does remain the case however that yield is hard to find globally and against that backdrop it is going to be hard for 30s to be pushing up too far before the attractions of positive real yields kicks in.

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