 from Washington. Well let's talk about some of the markets impact of this. This time we'll take a look at the bond market. U.S. Treasuries in particular. Mark Bailey from FIG Securities is joining us now and Mark good morning to you. I mean bond prices last week tumbling as Trump was elected. You brought a chart in to talk to us about this U.S. Treasuries market. We're going to bring it up on screen right now perhaps you can just for the benefit of our viewers tell us what we're looking at. Yeah. Good morning. So this is the way that the U.S. Treasury bond market has moved since before Trump was elected and afterwards. So the higher line is the current position on Thursday. Obviously the U.S. market was closed on Friday. And what you can see there is in the in the last week we've seen a bear steepener. And so what that means is that the curve has not only shifted higher but has also steepened in terms of that has been a higher increase in those yields in the longer end from the 7 to the 30 year. There's probably been around about a 32 33 basis point increase in yields which is which is really really significant. And in terms of a basic point move it kind of is on a similar scale as we saw during the 2013 taper tantrum but much less movement in the shorter end. So that's why the curve has steepened. And the reason for this is because the market believes that Trump will increase its fiscal his fiscal spending of the U.S. government and that will potentially lead to inflation and obviously inflation and potentially higher interest rates from the Fed down the line will impact the longer end of the curve in a more significant way than the shorter end. In that regard we've been telling investors to move shorter for the last several months because at that stage the risks were very asymmetric in terms of the risk to the downside was significantly higher than the upside of where current yields are. And that's probably still the case. I still think there's going to be a further steepening of the curve as markets investors and participants still try to position for that future fiscal spend. However having said that I'm not actually convinced that inflation is going to come through as quickly and as dramatically as people think. Now if the reason for that if you wind back the clock to QE back to 2008 2009 and you know everybody thought with all this monetary stimulus we would see inflation coming through and that certainly did not happen. It kind of almost rewrote some of the monetarist textbooks. And so I'm not convinced that even if you do have fiscal spending coming through in the United States you will you get inflation in the States. And then that will that inflation be exported into the other economies of the world given the current amount of slack that you're seeing in labor markets in Europe less resting obviously in Australia. I'm not convinced that you're going to see inflation coming through. So at some stage it may be a time to move into a longer dated duration bonds but at the moment that's not the case. So when it comes to your analysis about inflation and the likely story I mean is that just speaking to this paradigm shift that we still don't need know the X factor as to why we're not seeing that inflation translating as perhaps would have been expected through QE and perhaps as you surmise won't be necessarily coming from this massive spending we're expecting to come from Trump. I mean why is that it's still not clear. I think in terms of inflation the world at the moment is such a more global economy in terms of people and their purchasing decisions they know what each of those individual items costs and whether they can source that cheaper from the States or from China or within Australia for example and they know before they go into any kind of shop or any kind of decision that information is much more freely available than it was 10 15 20 years ago where you know you had really no idea of whether the price that you were paying in your local store was a good price a bad price you know what the reviews were on on that individual product so I think there's a lot more information out there and that is helping to make consumers and purchases have a better informed decision making process and have a better idea about price and if they can source that cheaper elsewhere and if they can they're not afraid to to use that to alternative source. But I'm just questioning because it's not just consumer inflation that we're talking about though we're talking about you know the prices that producers pay as well and if we continue to see commodities move in some of the manner that they have as of late that could stoke inflationary global inflationary pressures could it not. Absolutely you can certainly see some kind of cost push inflation coming through and one of the key determinants of another cost push in inflatory factor is wages and that wage growth will be a key figure that the Fed will look for in the December non-farm payrolls as it was in the November one so you can certainly see some kind of inflation pressure being put through but again the the ability for you know producers and manufacturers to pass those price increases through does become much more limited in the sense that you know those consumers do have that more information and there's still quite a bit of slack I think in the jobs market globally that will you know limit any kind of wage inflation coming through in terms of wage growth although we are seeing a few signs in the states and that's obviously one area to watch but at the moment I'm not I'm still not convinced that we're going to see inflation coming through as rapidly and as quickly as the market is priced in in terms of some of the dramatic moves that we've seen but I think we will still continue to see investors expecting and positioning their bond portfolios for that inflation to come through. Okay we'll have to pick this conversation up another day because we're just scratching the surface of it as usual Mark but I'm appreciate your time this morning. Thanks indeed have a good one. Mark Bailey there joining us from FIG