In general yes I like steepeners and we've been playing forward swap steepeners with MI2 clients since September. But I think we have priced a lot into the whole curve at present, from EDs to 30's. So before adding to positions I'd want to see how the Fed reacts and the trade situation pans out.

Hi Robert M. Australia has a lot of issues both domestic and as a result of a slowdown in China. That said 0.6800 vs the USD is a major level so its important to watch. Personally, I'd love to see .6000 and even below but that depends on the Fed hanging tough. The moment they really start to ease its important to realise that they have a fair but more room that the RBA to weaken the currency.

Thank so much for your explanation!

Hi Hugh, well as we said in the piece, we don't have a view on the $ vs the majors only the Asian currencies. So in that sense we aren't looking for a major $ up move. That said GLDW has had a decent bounce (keep you risk tight), because its always possible, especially if the trade talks go badly that the Chinese let USDCNY break 7.00, which triggers broad strength. However, even if that happens my bet is that because that would be so disruptive, the Fed will act quickly to cut and so while I'd expect gold to suffer in the turmoil, I don't think we are in danger of a collapse. What I wouldn't like to see is a drop below 127.

Hi Jack Q. The piece was mostly focused on our trade recommendation of TLT, which is a mix of 10's and 30's. EDs and 2yrs are a little different. That said at present with close to 4 cuts priced those are also a little rich. In fact I think there's decent odds that the Fed fails to endorse the markets moves an in the short term we could get some weakness. That said if 2 year yields get back to 2.2%-2.4% I think those are pretty attractive levels given the current dynamics and absent a real trade deal.