The US 2s-10s curve is threatening 50bp, the flattest in over a decade and a source of almost endless debate (and very little agreement) among commentators. After the curve broke 50bp in May 2005, the S&P 500 rallied for two more years as the Fed raised rates 9 more times (peaking at 5 ¼% in mid-2006), observes SG in a note today. In today’s macroeconomic briefing we highlight one piece of research that shows how liquid derivatives markets, where price discovery occurs efficiently each day, are expressing an exceptionally high confidence that neither earnings, inflation, correlation, volatility nor geopolitical risk will unfold in a manner unfriendly to the market. On top of this, the S&P 500 P/E multiple has rarely been this elevated and appraisals like the well followed BAML fund manager survey shows that a record number of investors are taking a higher than normal amount of risk. We also include an asset allocation piece from Longview Economics that recommends an OW equities position. On China, UBS assesses the prospects of more concrete economic policy coming from the upcoming Economic Work Conference and a steady as she goes approach, Nomura discuss trading strategies on bullish Brexit outcome, while MRB assess how the flat US yield curve will impact US financials, if at all.