yield curve

Inflation should also feed market volatility and a relatively steep yield curve, he said.

One consideration is the current extraordinary steepness of the yield curve, which serves as a sort of anchor for longer-dated Treasuries.

So far, the trading boom fuelled by a steep yield curve has more than made up for the hit.

Its yield curve flattened almost to the point of inversion a month ago, and in recent weeks it has steepened again.

Any unwelcome rise in the longer end of the yield curve will more than likely be countered by rhetoric to that effect from Fed members.

China holds the world's largest currency reserves, enough to buy up the share prices in New York or sell down the yield curve of the T-bond.

This may be the type of easing from which homeowners can gain relief, not more machinations at the short end of the yield curve.

The policy is named after a similar attempt to "twist" the shape of the yield curve in the early 1960s.

A cut in short-term interest rates that is not matched by falls in long-term interest rates will produce a steeper yield curve.

Since the VIX lags the yield curve by about two years, it could stay at low levels until March 2012, she says.

She points to the change in the difference between two-year and 10-year Treasury yields, known as the yield curve.

Consequently, there is not one rate duration but a vector of rate durations representing each maturity on the yield curve.

A flat or inverted yield curve (when short rates are above long rates) has traditionally been seen as a harbinger of recession.

It has held back currency appreciation and steepened the bond yield curve, supporting banks.

The outperformance of longer maturities narrowed the difference in their rates with shorter-dated debt, or flattened the yield curve.

In other words, the single euro yield curve would be secure for fiscally prudent euro members.

Technicalities aside, the most plausible explanation for the steep yield curve is the interaction of monetary and fiscal policy.

Delegates will construct a zero coupon yield curve from a set of various securities .

In addition, these simulations require yield curve simulation over a presumed relevant range of rate movements and yield curve shifts.

By altering the supply of different types of debt, the idea was to "twist" the yield curve.

This simply extends classic open market operations up the yield curve.

But as the exit unfolds, demand for market funds automatically increases, rates rise and the yield curve steepens.

The difference between short and long-term interest rates is key. Keep an eye on the shape of the yield curve, not just yields.

The shape of the yield curve (the difference between long- and short-term interest rates) also makes a difference.

The US yield curve flattened as short-term interest rates rose while long-term rates traded within a narrow band.

The Treasury yield curve will slope upwards, reflecting liquidity premiums that increase with maturity.

This caused the yield curve to flatten, because the bulk of the safety play began coming out of the shorter maturities.

The following chart shows the relationship between the slope of the yield curve and the profits cycle.

It would be tough to trigger an inversion of the government yield curve, with short rates at this level.

An inverted, or negative, yield curve slopes downwards from left to right, with short-term yields higher than long-term yields.

An upward-sloping yield curve, in which long-term interest rates are above short-term rates, is normal.

an upward-sloping yield curve implies that the market expects an increase in short-term rates.

Bond markets usually signal recession through an inverted yield curve, when long-term rates are lower than short-term ones.

What is important, however, is the flatness of the yield curve and its effect on lending across all credit markets.

Day two will look at portfolio construction and an analysis of the yield curve establishing the expectations for the future interest rate.

As McKinsey says, the prospect of rising global investment demand relative to savings means a steep yield curve.

The near-term yield curve on the pair's government bonds is steeper than in most other countries, suggesting the markets agree.

We then consider the issues that arise with regard to offshore investor's influence on the onshore yield curve.

That is especially so at the moment, given the steepness of the yield curve.

But you will also have to establish a yield curve. That requires an independent central bank.

The Fed engineered a steep yield curve in the early 1990s to boost bank profits after the savings-and-loan crisis.

When the yield curve flattens or inverts, it is a signal that investors expect lower interest rates and lower inflation in future.

This time, however, a steep yield curve is hardly stimulating bank lending.

Changes in the yield curve over time are closely analyzed by market professionals.

That is quite normal in a recession, but an excessively steep yield curve could become a big problem for the central bank.

The yield curve, however, is also an indicator of the stance of monetary policy.

A yield curve is not static and can change quickly at any time.

The resulting flatter yield curve hurts bank earnings.

In a way, the yield curve has inverted.

An indirect bail-out by the Federal Reserve is also under way, via the yield curve.

Periods when the yield curve is inverted (short rates are above long ones) are less common.

So the record flattening in the Chinese yield curve suggests that investors expect lower interest rates and slower growth.

A steeper yield curve should allow banks to earn a spread and encourage them to lend.

In Brazil, the yield curve has inverted in the past month, suggesting rising anxiety over growth.

True, the Fed's zero interest rate policy has kept the yield curve steep.

Banks will continue to coin profits from the steep yield curve.

Yes, China has a government bond market. It even has a yield curve.

But, as UBS notes, an inverted yield curve is not necessarily a harbinger of doom in China, as it can be elsewhere.

So what does a very steep yield curve tell us?

This is not a classic inversion of the yield curve, as we are not comparing like-with-like*.

Rate cuts in 2007-08 greatly steepened the yield curve, handing banks a huge boost in profits.

Rate cuts in 2007-08 greatly steepened the yield curve, handing banks a huge profit boost.

What is the shape of the current yield curve?

The flatter yield curve means less profit from borrowing short-term money to buy Treasuries.

Offshore activity in the currency might also affect the shape of the yield curve or the exchange rate.

funds transfer pricing; yield curve; interest risk; interest rate term structure;

A downward-slope yield curve implies that the market expects a decrease in short-term rates;

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