Morgan Stanley has identified a potential Trump presidential victory as a significant factor influencing the bond market. The investment bank suggests that a Trump win could lead to a steeper yield curve, with growth likely to slow and inflation expected to rise. This scenario has prompted investors to consider curve steepeners as an attractive bet. Treasury yields have resumed their climb, with 10-year yields up 15 basis points since the recent debate. Investors are also weighing the potential for higher tariffs, tighter immigration restrictions, and an extension of the 2017 tax cuts, which could further fuel inflation under a second Trump administration. Historical data shows that after Trump's 2016 victory, the 2s-10s spread steepened by 30 basis points. Current levels indicate the 5s-30s spread is at +20.1, and the 2s-10s spread is at -29.6.
Financial markets are pricing in more inflation under another Trump presidency—and bond yields are surging. https://t.co/u690hEnJdL
The bond market is acting like Trump will win https://t.co/PxiEJesBax
Bond markets itching to push the ‘sell’ button is Trump is elected. 🇺🇸🗳️ https://t.co/WuT4wmDDQ6
🇺🇸 #WallStreet Maps Out What a #Trump Victory Would Mean for Bonds – Bloomberg https://t.co/W0moJCNk2y https://t.co/1HRKQ4XA1y
Investors are closely evaluating the potential impact of a second term for President Trump on the markets. #investing #markets #PresidentialElection
Traders weigh the possibility of another Donald Trump presidency https://t.co/nCwhruAWqT
Morgan Stanley's explosive call on interest rates if Trump wins https://t.co/Sie3C8Smqy
Significant steepening of yield curve since just before debate. levels are 850PM NY time 10 minutes prior to debate 5s 10s -1.3 then vs +4.0 little while ago 5s 30s +12.3 vs + 20.1 10s 30s +13.6 vs +16.1 2s 5s -39.9 vs -33.6 2s 10s -42.5 vs -29.6
Investors weigh the potential for higher tariffs, tighter restrictions on immigration, and an extension of 2017 tax cuts to fuel inflation under a second Trump administration. https://t.co/TQo50Qgzzv
One opinion on the UST bear steepening the last two trading sessions: "As implied in recent posts, the markets are going to want to steepen and/or sell off the long end on a Trump win. We can see this from 2016, where 2s-10s steepened about 30bps after a Trump win. This made…
Treasury Yields Resume Climb as Morgan Stanley Flags Trump Risk https://t.co/JzH8wpgvML
10-year yields up 15bps since the debate.
Morgan Stanley says the Trump trade is to bet on a steeper yield curve https://t.co/KWMRTLSN9b
The growing specter of a Trump presidential victory is making curve steepeners an attractive bet as growth will likely slow and inflation quicken under such a scenario, according to Morgan Stanley https://t.co/n8ECkpzO9q