This page has been archived and commenting is disabled.
Treasury Yields Are Crashing (Again)
The 'miss' on nonfarm payrolls but 'beat' on the unemployment rate appear to have been the perfect anti-goldilocks - not bad enough to warrant Fed speakers to discuss resurrecting QE and not good enough to confirm the growth meme... Having initially tumbled, Treasury sellers came in quickly after the NFP print, but since that BTFD, yields have collapsed 9bps... As we warned here, the market is still notably short bonds and liquidity is anything but strong.
The BTFD failed...
and the buying is across the entire complex...
and remember - the market is still notably short bonds...
Charts: Bloomberg
»
- 8413 reads
- Printer-friendly version
- Send to friend
- advertisements -
Bullish.
Need MOAR bartenders and waiters.
At this rate we'll need a lot more and suicide clean up is looking bullish too.
Let um crash, fuck it.
yeah not like they can afford the interest on those shits anyways. they can essentially buy the entire curve via more QE. they can not however, control the entire forex market.
Curve is flattening as tighter monetary policy is coming. What's the surprise?
Can you please define "tighter"?
Attn Bears: before getting too excited, just saw one of the biggest, sudden Russell volatility slams at 10:35 I've seen in months, got out of my short just in time, now the VIX is following suit. Either the machines are going for a 'double entry' to reshort, or the algos will push to new highs. Have noticed a delayed turn-on of machines on JOBS day, often waiting till close to 11, rather than the standard 10:08. Is this a ruse, or more endless levitation?
Most indices now back to or beyond Unch., looks like they waited til 10:30 to turn off the Pre-JOBS hedges, crushing VIX vertically down. So, is this a continued directional bet, or just an unwind that will falter by 11:25?
i wish we didn't call it "algos" and instead could point out that it is 2 individuals at different firms acting in criminal collusion, i a pre-arranged scheme to manipulate prices. That's more than enough for a criminal conviction, if we lived in a just society.
Yeah, while we're trying to convey it's an automated process not stemming from 'fundamental' moment-by-moment human assessment, 'algos' makes it sound like no one's behind it, just computer Hal gone haywire.
i wish we didn't call it "algos" and instead could point out that it is 2 individuals at different firms acting in criminal collusion, i a pre-arranged scheme to manipulate prices. That's more than enough for a criminal conviction, if we lived in a just society.
You guys keep having a major disconnect here. Rates and the market have been joined at the hip since the 80's. They may move at different times giving the appearance there's inverse correlation, but the path of interest rates needs to explode higher in order to get the magnitude of sell off you keep calling for. Common sense tells you that if over the past 5 years the market has followed bond prices higher, you have to spike yields to spike Vol. That's a fact, Jack.
no, I don't think I understand your pov. we are talking here about USTs, aren't we?
your "the market" is not only domestic, and heavily dictated by foreign dollar liquidity and reserve needs. particularly now where the FED is angering various foreign central banks by giving them different currency swap arrangemens then before, or in certain cases none, and so creating various dollar liquidity crises all over the globe, causing "spot" runs on dollar assets, of which the UST is of course the most important
instead, you talk about it as if it was all about a pure profit calculation behind buyers and sellers, without any global reserve currency movements in a strong dollar and "mopping up" leg of the currency wars
It doesn't matter if you are talking about here in the U.S. or Europe.Central Banks main tranmission mechanism is how they "fix" interest rates. When do equity markets get cracked and when does Vol spike? Higher interest rates. What's holding Europe together right now and what is keeping the BTFD mentality alive? LOW RATES. What funds buybacks? LOW RATES. Lower rates are what is keeping the whole system intact. Higher interest rates will equal wipe out in equity. Go do some capital structure research. Bonds will become equity once the shit hits the fan.
If what ZH is saying is correct and rates will drop to new lows (or test old lows) expect a corresponding move HIGHER in equity prices at some point. Only when total confidence in CB's is lost will rates explode higher and equity get totally wiped out. This will be to the surprise and shock of many a PM who are in no way positioned for this. (Talk about the mother of all sentiment trades!)
Crashing? Come on ZH.
When you are leveraged hundreds of times, even a tiny move is a crash.
surely no serious financial entity would ever do such a foolish thing, ever /s
No, they all learned a lesson from Corzine's mistake and subsequent conviction.
The bankers have control of the press. They can print any amount of money and give it to themselves and as long as they don't spend it nothing happens unless they want something to happen. BTFD
Safe haven... until it's not. Unlike the BoJ which is the only buyer of Japan Gov bonds, the Fed ain't buyin' Treasuries (at least not openly). As long as the price of those bonds goes up, the Fed avoids default. Do you really think yield suppression has anything to do with BLS numbers? That would assume there is a real market with real price discovery. There is (a market), of course, but it will not re-assert itself until it does so with destructive force.
so if the TIP auctions go at a discount, do you buy these securitized notes and wait for CPI to kick in?
Well, they are either at a discount for a reason or your faith in an honest CPI calculation will be rewarded. Hmmm...
the last auction went discounted 5%, the next will probably be better that. i still dont get it your principle is guaranteed, you get 5% up front for buying, and you have a CPI tracker and always always always inflation is meant to run faster than yields. Bernanke doesnt like these things, (isnt that reason enough?) and maybe greenspan will give a heads up, now that he has praised gold. the only problem with gold is that it tracks market cap, and if that disappears gold will lose value as well. if there is deflation the TIPs will hold their value and now we're talking strong dollar, don't you want physical dollars? isnt that what you're buying with an inflation hedge built in?
Maybe Treasuries are looking at a hot war in Ukraine vs. the 'perfect' jobs number?
KIEV/MOSCOW (Reuters) - Ukraine's military accused Russia on Friday of sending a column of 32 tanks and truckloads of troops into the country's east to support pro-Russian separatists fighting government forces.
"Supplies of military equipment and enemy fighters from the Russian Federation are continuing," military spokesman Andriy Lysenko told a briefing in Kiev, describing a column that included 16 big artillery guns and 30 trucks carrying troops and ammunition as well as 32 tanks.
Putin
Still no independent confirmation, right?
Treasury yields are in a long-term bull market. It's prices that are going to suffer...
http://www.globaldeflationnews.com/10-yr-treasury-index-yieldelliott-wav...
You took the words right out of my mouth. Of course, it looks like no-one (judging by number of comments) is paying attention.