Front end trades are a bet on the calendar, not the economy
Short duration traded at 81.12, -0.01% on the session. The two-year is arithmetic on meeting dates, and it gets discussed as though it were a growth forecast.
Two decades trading sovereign bonds. Curve trades, auction reads, and what the long end is really telling you.
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Short duration traded at 81.12, -0.01% on the session. The two-year is arithmetic on meeting dates, and it gets discussed as though it were a growth forecast.
Long duration traded at 82.19, -0.12% today. A steepening curve and a recession bid are not the same thing, and conflating them costs money.
Heavy government issuance is the reason given for high long yields. By now the market has priced a great deal of it, which changes the balance of risk.
Buyers of inflation-protected bonds think they have bought safety from inflation. They have also bought duration, and real yields can move against them.
The front-end pricing I track against the likely path of policy.
The real yield levels I think separate tight from neutral.