The yield curve continued to flatten | 21 June 2021

21 June 2021, GBP/USD

The yield curve continued to flatten

GBPUSD trading plan:

Long-dated U.S. Treasury yields fell, and the yield curve continued to flatten as market participants bet that the Federal Reserve will act sooner to clamp down on inflation pressures if they persist. The Fed surprised markets on Wednesday when it said that policymakers are forecasting two interest rate hikes in 2023. The many traders are unwinding trades that were betting on higher inflation as the U.S. central bank indicates it will not let price pressures surge as high as some feared. The yield curve between two-year and 10-year notes flattened to 122 basis points on Friday, the flattest since February.

Investment idea: range 1.3790 -1.3880.

David Johnson
Analyst of «FreshForex» company
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