5-Year Treasury Yield Tumbles Below 2.00% As Short-Squeeze Picks Up

Tyler Durden's picture

Five-year Treasury yields have tumbled back below 2.00% to the lowest levels in almost three-weeks, extending the drop amid the weakest economic growth period for a rate-hike since 1980.


The yield curve has flattened dramatically in the week since The Fed hiked...


With net positioning near record high shorts, and everyone and their pet rabbit sure that a breakout above 2.15% was 'inevitable'...


And while some of the Treasury short has covered, the massive extension of Eurodollar shorts more than offset it - leaving 'shorts' across the entire curve at record highs...


We wonder what happens next.

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SenselessPanic's picture

indeed - the "market" will hurt as many as possible

NugginFuts's picture

Better stay off the sidewalks for a while, eh?

38BWD22's picture



This ZH article and the last (used car prices down, and now lower Treasury yields) hint at DEFLATION.

knukles's picture

And everybody thought that shit was gonna really really wonderfully and mysteriously, all hail hallelujah things was gonna be set right in mere days.
Not much has really changed. 
Wall Street and the banks, the color revolution, media frenzy, whatever ....

The ONLY THING we got is nothing more than the gloaters and gloatees changin' seats for a few years.

LawsofPhysics's picture



You are an idiot.  Deflation, in what exactly?

Deflation in plastic crap from china and financial "products"?  Sure.

With 7+ billion all competing for the energy and resoures required for a decent standard of living, don't expect too much deflation there!!!




There is no market there fucknut.

Thinkpad's picture

Bingo I've always thought ex food and energy made aboslutely zero sense. Ex food and energy your starving in a cave and using wheelbarrows and sailing ships to transport goods and services. In fact air prices are skyrocketing. My can of compressed to clean laptop was 2..99 12/2016. 4.99 2/2017 and 5.99 3/2017. Go figure. 

motorollin's picture

My wage is deflating, does that count?

BigWillyStyle87's picture
BigWillyStyle87 (not verified) 38BWD22 Mar 20, 2017 11:51 AM

That is a wonderful analysis, very well thought out. So by your logic, we have been in deflation since the early 80s seeing as how treasury yields have been going down ever since Volker jacked em up.



Thinkpad's picture

Used car prices being down I think you can find more accurate indicators of inflationary trends used car sales is not one of them unless you can construct a valid argument and prove there is a correlation. Danger danger danger used car prices have plummeted forcing Fed to rethink it's rate normalization program. Gee whiz get a grip. Revisit what Yellen said last week ponder her comments. Before you scream deflation indentify the drivers of that economic indicator and ascertain if they are declining suggestingv deflationary pressures. Danger danger danger desposable diaper prices and pacifier prices have plummeted suggesting deflation is on the way and here to stay. 

Hohum's picture

The answer is "nothing."

knukles's picture

What could go wrong?  Tell me, what could go wrong? 
The global economy is weakening, the world's entered into a new global currency war, tariffs and trade restrictions are being imposed, there are third party forces attempting sedition via a color revolution and the Goldmanites are in Greater and New Full Regalia


mary mary's picture

I am about 50% in bonds (BND), based, strangely, on both trend-following and negative sentiment.  If it goes up 1% or 2%, I will be happy enough.

zjxn06's picture

"I am about 50% in bonds (BND)"

Bonds = Return Free Risk

mary mary's picture

At least, less risk than stocks, I think.

knukles's picture

And I'm so Goddamned happy that Law Enforcement found Brady's missing jersey.

Fuck me that feels good.

Excuse me, my cynicism seems to have reared it's pointed little head.

I am Jobe's picture

THank Goodness. What would Americans do if this wasn't found?  

NugginFuts's picture

I'm still waiting for a tweet about it from Brady's "bigliest" fan....

Seasmoke's picture

What could happen ??? QE4ever.

LawsofPhysics's picture

QE4ever is already happening!!!!

Yen Cross's picture

 Not good for usd/jpy when the short end of the curve crashes.