Talks of the US Treasury auction today is reigniting the good ol' debate
Since the start of the year, we have seen the yield curve steepen for quite a bit - spurred by talks of higher inflationary pressures, which in turn gave a lift to the longer end of the yield curve.
But in the build up to today's auction, we're seeing the yield curve start to flatten again. Is this a coincidence or a turning point?
Some quarters in the market still believe the curve is still steepening, and that will in turn spillover to yield curves in Europe - more specifically spark a steepening in the German yield curve as well.
While it is still too early to tell at the moment, this is something worth keeping an eye out on. Especially when the US looks to finance their deficit through the front end of the curve, and we will get more focus on this as the year goes by.
The auction today sees the US Treasury auctioning debt worth $151 billion of short-term bills as well as $28 billion in 2-year notes.
