03 Apr – 07 Apr 2017


Yields fell in pretty much every segment of the bond market and, of the yields on 3, 10 and 20 year bonds, 10 year yields fell the most. As a result, the 3 year/10 year spread has tightened by 1 basis point to 77bps while the 3 year/20 year spread widened by 4bps to 136bps. It is a little unusual for these two spreads to go in opposite directions and usually some form of catch up occurs shortly thereafter. Such a divergence does not generally mean anything; short term demand or supply factors are typically the cause.