Someone is going to be very disappointed...

In the 12 months since President Trump's election, stock prices and bond yields have jumped, however, as the chart shows, bonds have flatlined in a narrow range for the last 10 months as stocks have legged higher...

... on a bed of global money-printing...

However, much more significant has been the shape of the yield curve compared to equity exuberance...

Having spiked as high as 136bps, the 2s10s curve has now flattened to just 68bps and is at the flattest since 2007, and the 5s30s curve (79bps) is also at the flattest in 10 years.

Alternatively 2y yields have moved from 0.854% on election day to 1.629% now and the highest in the last year. 10y yields were at 1.855% on election day, touched as high as 2.626% in March and are now at 2.309%. The equivalent for 30y yields is 2.616% on election day, 3.212% high in March and 2.770% now.

So while equity markets may have benefited from high expectations for fiscal spending, US Treasuries have by and large priced out any expectation with each passing day under Trump’s presidency.

Who will be right?

For now 'hope' as a strategy is winning...