Treasury Butterfly Collapses To Multi Year Low As All Market Correlations Now Broken
The last stat arb desk has just turned off the lights. Stocks are on their own, as all correlations between bonds and stocks are no longer meaningful, even as the carry trade holds on to some semblance of meaning, but even that is collapsing fast. In this most manipulated market we have ever seen, in which only the Fed is the catalyst for any buying action any more, only those with an investment horizon of 5-10 milliseconds are advised to trade. Everyone else, stay away, or else enjoy waking up to an Apple that is down between 5% and 50% as it (and who knows what else) goes bidless.
The collpase in the 2s10s30s butterfly, as all those calling for a 2s10s steepener and 10s30s flattener have just gone chapter.
h/t Credit Trader