Term premium

Not to go down the rabbit hole too much but below find graph of term premium of treasuries maturing between 1-10 years via Bloomberg. More to it I know but one can think of Lower term premium as a risk on indicator as long dated rate expectations drop.A weekly chart below show levels at lowest price in a few years.

here is same metric on a daily chart over last 6 months.Notice the big drop in premium as markets priced fed rate cuts.

A bonus Chart below , Average German bond yield of all maturities on a weekly time frame,Not a big surprise but to see it visually drives home the point a bit more ..

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