Rates are going to go up in the US in 2017. Not much debate nowadays about that. By how much? A bit more of a squabble here but between 0.5% and 0.75% about covers it.
But do not be fooled by the straightforward conclusion "don't buy bonds" - the yield curve is up for grabs in 2017. We see many opportunities for the yield curve to twist and turn as we head to a more "normal" rates environment in the US. So, where is this zigzagging going to come from in 2017? Firstly, Donald Trump. There is huge uncertainty over his policies. In Europe, there has been much focus on Trump's '$1trn' infrastructure promise during his election. How will it be financed? If the US government finances it all, Treasury yields are likely to push higher and it has the potent...
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