Bear/Bull; Steepner/Flattener

CFA Level III Fixed Income
#1

I know this may sound stupid, but I need some help with the following:

1.bear steepning
2. Bull steepning
3.Bear flattener
4. Bull flatterner

I know what flattner and steeper mean, but when I am facing a problem where it says that the yield curve will be either a bear steepener or a bull steepener, its not automatic to think if the short-term or long-term that is increasing/decreasing faster. Is there a way to remember this with some logic?

#2

Bull: bond prices are rising.

Bear: bond prices are falling.

So . . . in a bear steepening, either the long end of the yield curve rises, or else the short end falls. Which is it?

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#3

Life is easy If you already know what a flattener or a steeepener is.

Bear is having s-3-x with bull. Bear is always on top be it steep or flat.

You can make an inclined line steep by two ways -

  1. Make it steep from the rear end.
  2. Make it steep from the front end.

And, bear is having s-3-x with bull. So, bear is on top.

image

Similarly, you can make an inclined line flat by two ways -

  1. Make it flat from the rear end.
  2. Make it flat from the front end.

In this case too, bear is having s-3-x with bull and bear is on top.

image

This flattening thing looks like a ā€˜zā€™.

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#4

I was trying to get OP to arrive at these conclusions in his/her own. It sticks better that way.

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