Overall the dominant impulse for market rates is for a push higher to continue. Most of this is coming from the back end, and in particular the benchmark 10yr area. Hence curves are steepening (dis-inversion), as front ends look steady. We think this continues; ongoing dis-inversion, and curves lifting from the back end. The 10yr Bund yield has a (future) 3% handle written all over it, and 5% for the 10yr Treasury yield is looking more probable by the day. This bear market continues to be directionally led by Treasuries, and the risk-off tone in equity markets has not materially hampered it, partially as investment grade credit remains so well bid, and acts as a compressor. And so far any downward pull from the US government shutdown have been overshadowed by other factors. There should not be a huge Treasury impact from the shutdown in any case. Although it can become significant should it last for more than a month. - ING Rates Strategy
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