The bond flattener is relentless
US 2s-10s down to 54 basis points
It's tough to envision 3-4 US rate hikes next year with the yield curve staying positive.
At the same time, the flattener has been a popular trade for months so it could be dangerously crowded.
Talk today is that anticipated regulatory changes are making long-term Treasuries more attractive, especially related to swaps.
In any case, expect plenty of hand-wringing in this trade in the year ahead.