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30Y Treasury Yield Retraces 50% Of 2014 Plunge

Tyler Durden's picture




 

As 30Y yields push up to the highs of the day, steepning the yield curve across the entire complex, it has now retraced 50% of the yield collapse from the start of 2014 to early Feb 2015...

30Y Yields have retraced half the collapse of 2014...

 

and curves across the board have steepened dramatically...

 

Charts: Bloomberg

 

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Wed, 05/13/2015 - 14:33 | 6090094 Glass Seagull
Glass Seagull's picture

 

 

and said yields are already rich compared w/ Q2 prelim growth estimates.

Wed, 05/13/2015 - 15:38 | 6090438 disabledvet
disabledvet's picture

Growth in fact is not growth right now.

 

Equities are in the ionosphere right now as well.

 

Schumer and the Spendocrats are screaming about the Yuan when the Yen and Euro have already collapsed against the dollar.

 

Interesting that Tesla keeps hitting one record high after another tho.

 

GM, Ford, Chrysler...good luck.

 

Well...Ford has massive global operations so they should probably start IMPORTING Fords to the USA any day now.

 

Sony has had a great start to the year...

Wed, 05/13/2015 - 14:33 | 6090095 Winston Churchill
Winston Churchill's picture

This is either;

i) deliberate.

ii) The FedRes has lost control.

RUN.

Wed, 05/13/2015 - 14:39 | 6090111 LawsofPhysics
LawsofPhysics's picture

I'll take deliberate for $500!

The point of no return was actually passed some time ago.  The central bankers/planners will maintain control so long as the supply lines hold.  What did you expect from a bunch of arrogant hairless apes trying to avoid reality?

Wed, 05/13/2015 - 15:10 | 6090270 HROLLER
HROLLER's picture

I agree. This is deliberate. I think they want a rotation from equities into bonds.

Wed, 05/13/2015 - 15:00 | 6090207 vote_libertaria...
vote_libertarian_party's picture

Is it possible the Fed really did stop buying bonds at the EOY?

 

If so we may finally be seeing the Econ 101 lesson of supply and demand equilibrium.

 

They are adding $80B in new supply every month ($1T deficit) and the demand is from ???

 

Econ 101 says supply > demand = price drop

Wed, 05/13/2015 - 15:17 | 6090336 Spitzer
Spitzer's picture

Honestly ive been hoping for Econ 101 to remedy this for 8 years. But we go from peace time keynesianism to wartime keynesianism and then back. Just enough to keep the free market at bay.

Wed, 05/13/2015 - 16:03 | 6090593 gatorengineer
gatorengineer's picture

remember its 80B, PLUS what they have to rollover every month..... 

Wed, 05/13/2015 - 16:02 | 6090584 gatorengineer
gatorengineer's picture

ii) -  Fed has lost control.....  This is a carry trade unwind..... which implies a good time to short the dollar....  Whats left of housing will go down in flames, oil prices will rise.... World events will determine if and when the dollar becomes the best looking grapefruit in the dump again (read, if the peripheral bonds blow out).

Wed, 05/13/2015 - 14:35 | 6090101 Stoploss
Stoploss's picture

Well, now we know why the debt is frozen...

Like everything else, this too. will blow up in the FED's face.

It's crystal clear these idiots have no clue, and need to be stopped before they drive us into civil war, as if we're not there already.

Wed, 05/13/2015 - 14:46 | 6090132 Mrmojorisin515
Mrmojorisin515's picture

How do people still think they have no clue?  This was never about economics or repairing the economy, it was always ALWAYS only about power.  They know what they are doing, its the only thing they can do to buy time for them to figure out another way to hold on to power.  Hence why they are spying on everyone and arming up police stations.

Wed, 05/13/2015 - 15:17 | 6090332 BeansMcGreens
BeansMcGreens's picture

Just as you, I believe they know what they are doing, or at least think they know what they are doing.

In my opinion it has to do with the occult, and some false promises that somehow they are going to survive this upcoming storm of chaos, much of which is of their making. It will just be too big to control. Just in this country with drought in California and other western states, the bird flu ravaging the poultry industry, the police verses the citizen as you mentioned, absolultly no trust in government, unemployment, illegals, the list goes on, too many different factors to be managed at one time. 

Just finished reading again CS Lewis's novel "That Hideous Strength" . Recommend it highly.

Oh well.

Wed, 05/13/2015 - 14:37 | 6090109 KnuckleDragger-X
KnuckleDragger-X's picture

All the markets are showing strain and the bond market is starting to lose confidence. What the FED does next will have a large effect and I don't think it'll be more than a bandage.....

Wed, 05/13/2015 - 14:44 | 6090126 FreeShitter
FreeShitter's picture

Here's what Jade Helm is perhaps in response to. This shitshow is getting stinkier by the day, the cruel part is the fucking ones responsible will all be on private islands while this motherfucker burns.

Wed, 05/13/2015 - 14:53 | 6090177 Sages wife
Sages wife's picture

We're gonna need some boats. With rodholder-type deals for the pitchforks.

Wed, 05/13/2015 - 15:48 | 6090501 Stormtrooper
Stormtrooper's picture

The Federal Reserve will be OK. They already distributed their 3-day survival kits. Just wait it out.

Wed, 05/13/2015 - 15:44 | 6090143 Duck and Cover
Duck and Cover's picture

never mind.

On second thought ..... 

If you were a BIG fund and you were going to actually buy 30 year bonds at tomorrows auction - wouldn't you want to lock in the highest possible interest rate? -- and run bonds down as much as possible before?  Making the gov't pay up?

-OR-

You are a BIG fund and you are expecting a strong 30 year tomorrow - wouldn't you try to front run this auction by running stops on all of the longs - so as to pull off the tried and true- "wash and rinse"?

just saying ....

Wed, 05/13/2015 - 14:51 | 6090166 NoVa
NoVa's picture

Yup

Selling just like in Trading Places - bond traders know what's in tomorrow's Orange Juice report.

Wed, 05/13/2015 - 15:09 | 6090263 HROLLER
HROLLER's picture

.................

Wed, 05/13/2015 - 15:12 | 6090293 fremannx
fremannx's picture

Treasury yields will rise causing prices to plummet. The 10 Year UST yield is about to skyrocket and the resulting effect on the economy will be catastrophic...

http://www.globaldeflationnews.com/10-year-u-s-treasury-index-yieldellio...

Wed, 05/13/2015 - 16:49 | 6090775 zeroaccountability
zeroaccountability's picture

Oh, Christ....I clicked over there and it's that Elliot Wave hocus pocus.

Wed, 05/13/2015 - 16:51 | 6090789 zeroaccountability
zeroaccountability's picture

I love how they draw in the arrows to show the way they wish it would go....always straight up (or down). 

 

Dudes, just drawing a chart of the past doesn't mean you can somehow forecast the future from its entrails.

Wed, 05/13/2015 - 17:47 | 6090990 The Merovingian
The Merovingian's picture

Not going to happen. ... they are simply ramping them up so that they can run them back down .. volatility equals profits.

Wed, 05/13/2015 - 15:16 | 6090327 SDRII
SDRII's picture

ETFs were used to walk the equity market up by flogging the consumer confidence numbers and with Fink worrying about Insurance companies and low rates of late he doth protests just a little too much. Is that Geithner calling?

2012: Geithner has phone friend at BlackRock FT

 

"Mr Fink, the group’s chief executive, featured more frequently in Mr Geithner’s diary during an 18-month period than any other corporate executive, according to a Financial Times review. The two men spoke on at least 49 separate occasions, an average of about once every 11 days."

Wed, 05/13/2015 - 15:20 | 6090345 Counterpunch
Counterpunch's picture

good time to buy apple.

yeah yeah - just keep an eye on it this week...

Wed, 05/13/2015 - 16:08 | 6090621 gatorengineer
gatorengineer's picture

traditionally you would be spot on, with apple being the best safe haven play, but I think this time its going to be different...

Wed, 05/13/2015 - 15:20 | 6090348 I Write Code
I Write Code's picture

The 2014/Yellen plunge was a misteak, undoing it is almost meaningless in US terms.  Part of the problem was presumably money fleeing ECB NIRP.  Oops.  The question is more, how is it even possible that we have now seen this retracement?  Does someone think the dollar is going to continue down?

Wed, 05/13/2015 - 15:55 | 6090552 Weaponized Innocense
Weaponized Innocense's picture

Love this site but I really have to go walk my dog amd bathe and go eat now! So much goo stuff to read!!! But it stopped raining and I must especially since it is so cool outside!

Wed, 05/13/2015 - 16:00 | 6090579 Weaponized Innocense
Weaponized Innocense's picture

Thought I would just say I thought it was funny the tv all upset that the bonds can't look into the future of anything really and how dare they go up and front run the fed like doing so is a new thing ... Because the puppets don't have the world on tight enough strings as they flush the world down their toilets of pretend.
But yea it was worth the watch of how the TV acted as u all know I nibbled on the low of the yields.
But still nice to watch the balls of the liars for fascism. I mean since when do reporters control all they report on... Oh yea .... We have come a long way baby!

Wed, 05/13/2015 - 16:03 | 6090595 Weaponized Innocense
Weaponized Innocense's picture

But it did u show what idiots they be if they think these yield rises are front running the fed....
They think this market all simple in fundamentals (all fucked up to the core)!

Wed, 05/13/2015 - 17:00 | 6090827 Intellikon
Intellikon's picture

Called it May 3rd.. Algos say the rate melt-up will continue.. algos are typically right...

"Strong SHORT signal on 30Y US Bonds - the first in over 2 years... Good leading indicator of a frothy housing market correction"

https://twitter.com/Intellikon/status/595035345281888256

Wed, 05/13/2015 - 19:13 | 6091243 polo007
polo007's picture

According to Credit Suisse:

http://personal.crocodoc.com/waAog87

The Money Market Under Government Control

The Fed’s new Reverse Repo (RRP) facility could get big – very big – as interest rates start to rise, despite what Fed officials have been saying. The facility has been trending around $150bn, roughly 1/20th of the level of bank reserves.

A much larger RRP facility – think north of a trillion – would represent the endpoint of an evolution that began before the crisis, when large dealer repo books stood between institutional cash pools and leveraged carry trade investors to…

after the crisis, when bank balance sheets were expanded by both reserve assets and deposit liabilities created by QE to…

the future, when government-only money funds grow to hold large volumes of RRPs as assets and issue fixed-NAV shares (money) to institutional cash pools.

What are institutional cash pools? Think corporate treasuries and the cash desks of asset managers and FX reserve managers. Their demand for short-term, money-like assets has had a strong secular growth for several decades.

New regulations have constrained some investors in terms of what they can buy, and many institutions, in terms of what they can (profitably) issue.

History shows that when financial innovation occurs or rules change, the least constrained players grow.

In contrast to banks and dealers that face various charges on capital and balance sheet, and prime funds whose shares have lost “moneyness” due to regulation, government funds are relatively unconstrained.

They will likely grow, fed by an RRP facility that may grow much larger and become a permanent fixture of the financial system. In our view, this would herald the arrival of an era of financial “RRPression” in the US money market where the sovereign dominates and dealers play a supporting role – the inverse of the pre-crisis state of affairs.

While this shift would undoubtedly reap massive financial stability benefits, the main reason why the RRP facility might need to get much bigger is not financial stability related, but rather revolves around the Fed’s potential inability to control short-term interest rates in an era where Basel III and banks satiated with excess reserves hinder monetary transmission.

Why pay attention to this plumbing stuff?

Because the infrastructure of markets determines which trades can profitably be done, and which institutions will grow in importance over time.

This piece marks a return to our prior focus on shadow banking and the global financial system (see references at the end).

Do NOT follow this link or you will be banned from the site!