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The big risk that hamped yield curves is gone

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Tradehay.com: 28/01/2021 - 11:05

Bond traders who are betting on a steeper yield curve can rest assured

Reddit investor stories are fascinating, but for the bond market they won't be a problem until six months, when vaccine delivery is likely to be fertile ground. for a revival of the reflation trade.

Pfizer and BioNTech just announced that their latest studies do not indicate the need for a new vaccine to destroy new variants of the virus. This cuts off a huge potential danger. It helped to change market sentiment at the beginning of the Asian session.

The vaccine rollout is still underway, which means the reopening is on the horizon. Along with that, the stimulus packages will also be released soon. All of this means improving inflation and long-term growth prospects, higher yields, and a steeper yield curve.

Moreover, Japanese investors, who hold the most treasury bonds, have been absent recently showing indifference to current yields. Maybe these big guys are plotting something else?

Stephen Spratt, Bloomberg

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