One of the most popular deals in the bond market has gained new momentum in Europe as German treasury bonds experienced its worst plunge in more than 20 years, and long-term bonds were sold off. This type of operation, known as curve-steeper trading, is betting that long-term bonds will outperform short-term bonds. This was the market trend last week. After Germany said it plans to invest 100 billion euros in defense and infrastructure, the difference in yield between 2-year and 10-year German treasury bonds recorded the biggest increase in two years.

One of the most popular deals in the bond market has gained new momentum in Europe as German treasury bonds experienced its worst plunge in more than 20 years, and long-term bonds were sold off. This type of operation, known as curve-steeper trading, is betting that long-term bonds will outperform short-term bonds. This was the market trend last week. After Germany said it plans to invest 100 billion euros in defense and infrastructure, the difference in yield between 2-year and 10-year German treasury bonds recorded the biggest increase in two years.