The disconnect between the Fed’s hawkishness and the bond market’s dovishness continues to widen, with the US yield curve collapsing to its flattest level since 2007, observes BMI Research. In this report they outline a number of potential scenarios for the US bond market, and note that the risk of a Fed policy reversal is rising. That said, they still see US bonds outperformance to other DM bond markets. Mean time their very constructive on some EM bond markets, such as South Africa, where they have a strong recommendation. On the yield curve, BMI attach probabilities to 5 different possible scenarios that could play out.