In the second lecture we talked about trading between ten-year and two-year bonds in order to take advantage of differences between our forecasts of the slope of the yield curve and the curves current slope. The course materials page has a link to a short paper on this topic, albeit focused on bond futures rather than bonds per se.

Tags: Short rates, Monetary policy, Long rates

We talked briefly about the possible effects of pension fund investment on the yield curve i.e. that they might have a preference for long-maturity bonds, and that this might push long-rates down. We will look at this issue later in the course but in the meantime, the paper “In Brief - Immunization” on the Course materials page might be of interest.

Tags: Pension funds