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Trade Plan: An Opportunity with 5-Year US Treasuries
You can maximize the yield premium of 5-Year US Treasuries ahead of its steepening path.
By Metrobank
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With Donald Trump’s recent win in the 2024 presidential elections, US Treasuries surged higher in anticipation of potential reinflation under the new administration—empowered by a Republican-led Senate and House of Representatives.
With the US Treasury curve steepening, our traders see an opportunity to buy at high yields when bond prices are cheaper and wait for the yields to drop when they become expensive later. Such a strategy presents our investors with trading gains in one of the safe-haven, if not the safest, fixed-income securities.
Our trading desk recommends buying 5-Year US Treasuries at the 4.40% levels or higher and exiting their position at the target level of 3.75%, as the Fed continues its easing cycle through more rate cuts next year.
However, should these levels not be re