Daily Dirtnap examines how Steven Mnuchin’s Treasury ambitions, particularly ultra long bond issuance and tax reform, could reshape rates, yield curves, and risk sentiment. The piece also explores France’s shifting political landscape, arguing markets may be underestimating how growth policies could emerge across the Atlantic.
Century City
The Daily Dirtnap
Research
3 Pages
Key Takeaways
Yield Curve Steepening: The 2s10s Treasury spread widened from roughly 75 to 135 basis points between late 2015 and late 2016 amid expectations for longer duration issuance.
French Political Shift: Fillon held roughly a 2:1 lead over Le Pen, raising expectations for deregulation, labor flexibility, and a possible reversal of decades of economic stagnation.
Ultra Long Bonds: Treasury discussions around 50 and 100 year issuance reflected efforts to lock in historically low borrowing costs before additional fiscal expansion and refinancing needs.
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