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Vad säger Riksbankens räntebana
att Frasare i fronten skall ligga?
Givet dagens fixingspreadar
Households have become significantly more pessimistic about the next 12 months. In fact, the spread between the assessment of the current situation and the future has not been as negative since late 2007, early 2008. As it happens, this spread has been an excellent leading indicator of the SGB curve (10y-2y).
Swedish confidence and SGB 2y-10y curve
he decline in US bond yields may seem surprising given the steady flow of better-than-expected data. However, the move may once again reflect that swift-footed investors have been caught short Treasuries. While CFTC data show that positioning is not extreme and empirically current levels are inconclusive as far as future market action is concerned, short positioning goes hand in hand with a broad-based view among economists that US rates are on the rise across the curve. The pain trade remains on the downside for yields.
The non-reaction to Draghi’s dovish comments Friday must be a great disappointment for the ECB. Unlike after Draghi’s appearance in Jackson hole in August, breakeven inflation expectations (chart=5y 5y forward) have barely moved since Friday and remain at levels inconsistent with the ECB’s inflation target. Reports of a wage freeze in France will make things even more difficult for the ECB as stagnant wage growth means disinflationary pressure will mount further. The ECB is left with a massively weaker currency as the only road towards higher inflation.
EUR 5y 5y forward