J.P.Morgan Take Profit On 10s30s Flattener

J.P.Morgan note that “the long end has flattened considerably over the past week as front-end yields have repriced higher, and 10s/30s has moved to its flattest levels since the beginning of the month. Moreover, while the curve had appeared steep relative to the market’s medium-term Fed and inflation expectations recently, the curve has flattened relative to its drivers over the past week and now appears more fairly valued against this backdrop. To the extent that we entered 10s30s flatteners as a tactical bearish trade with a relative value overlay, front-end yields have risen, and the curve appears more appropriately priced, we recommend taking profits at current levels.”