NFTRH+; Pairs Trade (KBE & IWM)

In light of the dynamics in play in the interest rate market, one might want to watch a sector that favors rising interest rates (the Banks, given ZIRP at the Fed’s discount window) vs. rising yields out along the curve.  Even though the curve is dropping, if we assume that banks are funded near 0% their lending out across the curve would have a profit motive.

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Yield Curve Today

As surmised in the subscriber update posted just after the ‘Jobs’ report, jitters about interest rate hikes are bubbling to the surface in the T bond market.  This may also be a Straw Man to get people thinking risk ‘OFF’ when it remains ‘ON’, at least by the structure of the yield curve.  All maturities are up and people are flying out of short-term liquidity. … Continue reading Yield Curve Today