A Tale of Three Markets
The third quarter of 2017 was in many ways a tale of three markets for fixed income investors. When comparing the 10-year yield at the beginning of the quarter (2.35% on July 3, 2017) to the end of the quarter (2.33% on September 29, 2017), it doesn’t look like much changed. However, this couldn’t be further from the truth, as Figure 1 shows. Yields were moving higher when the third quarter began, as markets digested better than expected economic data and a hawkish tone from European Central Bank (ECB) President Mario Draghi. The 10-year yield was basically flat for July, before falling in August and recovering in September.
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