DURATION DESTRUCTION, AND THE TRADE DISPERSION THAT CAME WITH IT

The US Treasury markets appear to be calming down to end the year, RBC’s Charlie McElligott writes to clients. The key to watch is “real yields,” those that factor in inflation, as this indicator is telling a slightly different market story. Looking into January, McElligott, like other market analysts, sees potential for a mean reverting “ January effect .” Watch for interest rates and stocks to enter into January effect mean reversion Markets are setting up nicely for a January effect mean reversion trade, point out several analysts. While the consensus meme is that the Trump administration will usher in…