Beware the yield spike

THE US catastrophe play had been a bigly disaster, huge! A total mess.

Markets seem immune to the wackiest things. Brexit happened, but the FTSE 100 went up, helped by a sterling depreciation. Donald Trump won, but the S&P 500 rebounded to new highs. People are projecting their wish lists onto him, just like they did with Barack Obama in 2008.

Amid the noise, one thing stood out. The US 10-year yield has spiked, continuing a rising trend from the depths reached after Brexit. This means US Treasuries, typically regarded as the safest asset class to own out there, are being sold off by institutional investors.

The Treasury sell-off can be a sign of optimism or pessimism.

Optimists will say that the trend of slowly r…