“The Bear Market Is On Hold”: Deutsche Bank Throws In The Towel On Its Treasury Short

Six months ago, Deutsche Bank’s Dominik Constam – who roughly one year ago was lamenting the trendy at the time “secular stagnation” theme as an example of “capitalism in crisis” and was blasting negative rates as the “failure of globalization” – turned from prominent bond bull to bond bear, predicting a sharp jump in Treasury yields as the Trump reflation trade picked up traction and as Fed tightening accelerated pace.
Fast forward to this weekend, when Konstam became only the latest bond bear to throw in the towel on his trade reco, and as he abruptly writes in the latest edition of DB’s Fixed Income Weekly, “We are revising our forecasts lower – the bear market we expected to continue through 2017 seems to be on hold mainly due to the lack of progress on structural tax reform and we do not expect that to change anytime soon.”
In short, the “bear market is on hold” with the stated reason Trump’s failure to enact his proposed fiscal stimulus. Now if only somebody had warned Wall Street’s brightest and best paid minds just one week after Trump’s election that the president’s plan to “make America great again” was not going to happen…
In any event, here is Konstam explaining why he threw in the towel.

This post was published at Zero Hedge on Apr 9, 2017.