Risk appetite remains strong at the start of the new week, aided by a softening in tone of some of the more controversial campaign promises as Donald Trump, the candidate, continues to morph into President-elect Donald Trump.
The Treasury 30-year yield is slightly higher to 2.87% after trading to a 3 month low of 2.84 yesterday. The chart below shows support toward these levels as old high yield levels of 2.84% and 2.85% were reached in March and December ’14 respectively.
The Treasury curve reacts strongly to the employment data, widening the yield spread between 5 and 30 years above a trend line dating to mid-January. This yield spread trades to 122 basis points from a low of 105 bps at mid-month.