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Treasury Yields Drop Most In 5 Months As Market Reacts, Equity Futures Slide

Tyler Durden's picture




 

Risk-Off. Treasury yields dropped around 12bps across the curve from pre-NFP as the 10Y yield drops the most in 5 months. Equity futures are down the most in a month (20pts off pre-NFP levels) and testing lows as they catch up to credit weakness. IG credit is testing 100bps for the first time in over 2 months and HY credit is back over 600bps - its widest in 3 months. Gold has popped $10 or so to over $1640 and it appears we have a new FX regime with USD weakness implying market weakness as JPY strength (on repatriation and carry unwinds back to one-month highs) is the most impressive (and AUD weakness for same reason). EURUSD is leaking higher as is swissy, as the EUR-USD swap spread model converges on EURUSD's fair-value. Of course markets are thin, but ES (the S&P 500 e-mini futures) is trading relatively actively and testing lows once again as they close - not pretty at all as ES ends the week with the heaviest 3-day loss in four months (perhaps notably ending at 2011's May high print level).

 

ES (the S&P 500 e-mini futures) has seen it largest 3-day drop in 4 months and closed pretty much at 2011's May highs...

And 10Y Treasury yields have dropped their most in over five months in the last 3 days, breaking back below the 200DMA (on yield)...

Charts: Bloomberg

 

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Fri, 04/06/2012 - 09:18 | 2321814 ihedgemyhedges
ihedgemyhedges's picture

So Goldman was right!!!  wink wink

Fri, 04/06/2012 - 09:25 | 2321849 battle axe
battle axe's picture

Aren't they always, at least that is the federal governments position..

Fri, 04/06/2012 - 09:38 | 2321883 peekcrackers
peekcrackers's picture

you mean the Ferderal  reserve goverments position

Fri, 04/06/2012 - 09:18 | 2321819 monopoly
monopoly's picture

Well, it is long overdue. Maybe we will start to get some reality in the markets. Lets see how long it lasts.

Fri, 04/06/2012 - 10:24 | 2322007 Straying from t...
Straying from the flock's picture

The reality is that this has been planned all along.  In just 99 years, the Federal Reserve has taken the US dollar and debased it to nothingness.  There is but a fraction of the purchasing power left compared to when this great ponzi scheme began.  The banks and the fed have done a marvelous job in destroying our future.

Here is what I am telling my nearest and dearest in regards to what I am doing to prepare for the coming paper storm:

http://strayingfromtheflock.org/2012/04/05/an-open-letter-to-my-friends/

This is what I am doing.  What are you doing to prpare your family?

Fri, 04/06/2012 - 09:18 | 2321822 surf0766
surf0766's picture

Futures sliding... That is the understatement of the day

Fri, 04/06/2012 - 09:22 | 2321823 Biggvs
Biggvs's picture

But, but, that would mean Notorious B.I.I.G.S. was co-co-co-rrect in re-re-reducing his longs? Didn't he even say he was going short a couple of days ago?

Fri, 04/06/2012 - 09:20 | 2321828 SeverinSlade
SeverinSlade's picture

Nice to see gold and silver green post-NFP. 

So arguably the biggest economic indicator was a big miss.  With no QE on the table (for now), LTRO 3 not happening...What exactly is the bullish case for equities?  Queue Cramer telling everyone to "buy the dip" and that "stocks are still cheap."

Fri, 04/06/2012 - 09:22 | 2321832 fonzannoon
fonzannoon's picture

People are buying those treasuries now so they can sell them back to Ben later?

Fri, 04/06/2012 - 09:39 | 2321884 AUD
AUD's picture

If there's one thing the Fed will buy, it's Treasuries.

Fri, 04/06/2012 - 09:42 | 2321889 SeverinSlade
SeverinSlade's picture

Because paper and promises that are called TREASURE are more valuable that REAL treasure (gold).

Fri, 04/06/2012 - 10:27 | 2322026 max2205
max2205's picture

Wake up. It's the plan. Ben gets lower rates for his bloated balance sheet and the market gets a higher low soon. As far as can kicking the plan is working perfectly. Ben is the master of the solar system!

Fri, 04/06/2012 - 11:50 | 2322261 CrashisOptimistic
CrashisOptimistic's picture

Gold has no societal value.  If it reached a point where it threatened function of the system, transactions of it, buy or sell, would be taxed at 70%, globally.  And that would be that for gold.  You could not transact in cash secretly because you would never know if your counterparty is undercover law enforcement.

Treasuries are bought because there is no other game of size in town to hide in for those terrified.  The silliness of seasonal adjustments have caused the headlines that jarred the reading algorithms higher and now the piper must be paid and down we will go.  The piper in Europe has to be paid, too.

And guess what, Brent's spread has spiked back over $20 as even with a dollar surge of 5 pennies on the Euro, oil didn't fall.  

The idiots talking about cash on the sidelines still have not figured it out.  Yeah, there's cash on the sidelines.  It is waiting to for dips in Treasuries to buy them.

 

Fri, 04/06/2012 - 09:22 | 2321837 Snakeeyes
Fri, 04/06/2012 - 09:23 | 2321839 101 years and c...
101 years and counting's picture

fed has withdrawn 68B in liquidity in the last 6 weeks.  kill the markets so the fed can print.  everytime money is done being printed, the markets drop in t+30.

 

 

Fri, 04/06/2012 - 09:36 | 2321880 surf0766
surf0766's picture

$3.93 gas here. The economy stopped.  They print and you can put a nail the final nail in the coffin.

Fri, 04/06/2012 - 09:54 | 2321922 SheepDog-One
SheepDog-One's picture

YEP! Everyone knows the economy has ground to a halt, and if they print now it will detonate the whole country along with Europe. 

Fri, 04/06/2012 - 10:32 | 2322046 Cat Woman
Cat Woman's picture

$4.55 here.

 

Fri, 04/06/2012 - 09:40 | 2321887 peekcrackers
peekcrackers's picture

problem reaction solution

Fri, 04/06/2012 - 09:23 | 2321840 SeverinSlade
SeverinSlade's picture

So Bernanke is set to speak April 9th.  I'm willing to bet that he promises and alludes to nothing (no more QE for now) and blames the weather for the bad NFP number.  The Fed will likely take a "wait and see approach" with the economy which will lead to the necessary 10-30%+ correction he needs for more LSAP.

Fri, 04/06/2012 - 11:03 | 2322157 earleflorida
earleflorida's picture

Last week a well known brokerage house trader from the 'CME', came right out and said -"Bernake should stop being a Trader!" He's f***ing everything up.

Fri, 04/06/2012 - 09:23 | 2321844 rokka
rokka's picture

They'd bought more AAPL, if it was trading today.

Fri, 04/06/2012 - 09:24 | 2321848 watmann
watmann's picture

There really should be no surprise here. Rates were moving higher and the US Government cant take higer rates. Interesting to watch all of the press talk about the re election in the US and not have them realize that Big Ben controls who the next President is and he does not like the current President. Ben will soften the economy because he wants Mitt in the White House and cant stand BO. watch and you will see.

Fri, 04/06/2012 - 09:31 | 2321866 SeverinSlade
SeverinSlade's picture

If you think Bernanke is really the one calling the shots, you need a major dose of reality.

Bernanke has bosses too.

I'd argee that it appears more and more likely that Obumma loses in November (simply because the need for a major market correction prior to more QE and the lack of an Iran war to justify the Sept. debt ceiling breach) but if he does it's not because Bernanke wants him to...

Fri, 04/06/2012 - 09:36 | 2321879 the not so migh...
the not so mighty maximiza's picture

It doesn't matter who wins now.  its a null set.  Same policys and path no matter who wins.

Fri, 04/06/2012 - 10:08 | 2321960 DeadFred
DeadFred's picture

But if Mitt wins we won't be entertained by the doofus photo of Obama every time the teleprompter has something for him to say. I hope Tyler has a photo of slick Mitt ready to go.

Fri, 04/06/2012 - 13:40 | 2322571 Cpl Hicks
Cpl Hicks's picture

Meet the new TOTUS, same as the...wait...

Not true, Mitt will be an improvement. Maybe not enough for the gold, guns & ammo sceptic but an improvement nevertheless.

Think of the Bain Capital jokes. Nancy can wail, "He's the Bain of my existence!".

Maybe Olberman, if he gets another job (who knows..Syfy, Animal Planet, TVLand?) will go apopleptic and blow out all the blood vessels in his eyes.

Fri, 04/06/2012 - 10:26 | 2322015 WonderDawg
WonderDawg's picture

That's the reality, but try telling that to all the red team/blue team players. I'm so sick of the partisan bullshit, I'm running out of steam butting heads with the party believers. They're on the same team, for fuck sake. Jeebus, but people are fucking hard-headed. I'm still trudging, though. All you can do.

Fri, 04/06/2012 - 09:25 | 2321850 evolutionx
evolutionx's picture

It’s Tax Time: Time to Occupy the IRS

Every year I trek down to a nondescript office building near Wall Street with a bag full of receipts and a belly full of anxiety.

http://www.secretnews-compact.com/index.php?option=com_content&view=article&id=501:its-tax-time-time-to-occupy-the-irs&catid=1:latest-news&Itemid=50

Fri, 04/06/2012 - 09:29 | 2321862 ekm
ekm's picture

From our Department of Truth here in Canada, there were 73,000 jobs created for a population of 34 mil.

From your Deparment of Truth, there were 120,000 jobs for a population of 300 mil and again these are Department of Truth numbers. Do the math.

Fri, 04/06/2012 - 09:32 | 2321871 ZeroPower
ZeroPower's picture

All i can say re CAD numbers... oil sands. 

Fri, 04/06/2012 - 09:41 | 2321878 ekm
ekm's picture

No doubt.

My point is that 120,000 or even 300,000 is quite, quite, quite horrible. By comparison I wanted to show the stupidity of the number, which is in itself very much inflated.

Using numerical logic, US number should have been 10 times larger thus 700,000 jobs since the population is 10 times larger.

My rule of thumb:

- Canada Data: multiply by 0.7

- US data: multiply by 0.6

- Euro data: multiply by 0.4

- Chinese data: multiply by 0.2

Fri, 04/06/2012 - 09:30 | 2321863 davey
davey's picture

I still think gold hits 2000 by December

Fri, 04/06/2012 - 09:35 | 2321877 junkyardjack
junkyardjack's picture

Expect a wild ride before then

Fri, 04/06/2012 - 11:08 | 2322170 earleflorida
earleflorida's picture

easy,... and then some

Fri, 04/06/2012 - 09:31 | 2321867 Dow 36000
Dow 36000's picture

This means stocks are going up....right?

Fri, 04/06/2012 - 09:33 | 2321870 DollarDive
DollarDive's picture

The Easter Flash crash is a timed and planned opportunity to drop the futures while major markets are closed.

http://displacedema.blogspot.com/2012/04/easter-flash-crash-in-progress.html

Fri, 04/06/2012 - 10:17 | 2321985 jay28elle
jay28elle's picture

Interesting, and logical.  Gotta get the bad news out at some point, might as well be when there is an opportunity for the players to go in the news and try to smooze things up.

Fri, 04/06/2012 - 11:21 | 2322207 earleflorida
earleflorida's picture

what timing, a perfect respite to take profits and pulling-back the reigns on a seemingly parabolic market with no logic or reason. riding out the dip, if there is,... even a 10% pull-back, with a "just-in-time', wash-out" for the pre-summer [sell-n-may-and -go-away?] buying binge mentality -- onward ye` holidays to the hamptons

Fri, 04/06/2012 - 12:44 | 2322408 CrashisOptimistic
CrashisOptimistic's picture

Not this year.  Sell in May and go away extends the calendar to the point where the Jan 1 fiscal cliff looms and dominates headlines all the way to election day.

And then the really ugly thing about post election day lame duck Congress acting to address that cliff is . . . THEY CAN'T.  The ratings agencies will smash the US debt rating if they try to undo the fiscal cuts.

Fri, 04/06/2012 - 09:42 | 2321890 mendigo
mendigo's picture

frying pan - fire

someone did not read the playbook: bad news = good news = risk on
may the fed be with you

Fri, 04/06/2012 - 09:42 | 2321893 firstdivision
firstdivision's picture

Looks like some people are setting up for a QE trade.  Gold up, dollar down....someone is buying equities and hedging with treasuries.  This is going to get interesting.

Fri, 04/06/2012 - 10:19 | 2321990 SheepDog-One
SheepDog-One's picture

Well sure, all the entire world market is now based on nothing but guessing if and when Ben will print. Disgusting.

Fri, 04/06/2012 - 10:50 | 2322094 firstdivision
firstdivision's picture

My guess is too soon to put on the QE trade.  Strategists seem to left out WTI/Brent from their equations.  WTI has to be below 90 to get QE, til then Ben has to sit on his hand and play "stranger".

Fri, 04/06/2012 - 12:15 | 2322341 slaughterer
slaughterer's picture

Point taken, but it is never an "if" it is only a "when."

Fri, 04/06/2012 - 09:45 | 2321899 asteroids
asteroids's picture

Canada reported the creation of more than 80k jobs. Total BS. But I guess that's were all the missing US jobs went to. I can't wait to see the next food stamp numbers.

Fri, 04/06/2012 - 09:52 | 2321916 mendigo
mendigo's picture

Warm and dry spring
Blankfein and Bernakenstein better watch

Gods coming... and she's pissed

Fri, 04/06/2012 - 09:53 | 2321920 orangegeek
orangegeek's picture

Closes below support channels in both the Dow and  SP500 on the daily's this week.  Just another indication of weakness.  Diverging MACD too.  Anaemic volume.

Could be a top.

Have a look for yourself.

 

http://bullandbearmash.com/latest/sp-500/daily/

Fri, 04/06/2012 - 09:55 | 2321925 SheepDog-One
SheepDog-One's picture

Simple Jack economic world....but hey go ahead and print Ben, Id kinda laugh when gas jumps over $6. 

Fri, 04/06/2012 - 09:58 | 2321934 the not so migh...
the not so mighty maximiza's picture

it is sorta like a spectator sport, which way will the idiots go now.

Fri, 04/06/2012 - 09:59 | 2321936 WoodMizer
WoodMizer's picture

Where is that angry redneck, breaking shit and talking econ?

We need his leadership these days.

Fri, 04/06/2012 - 10:31 | 2322043 WoodMizer
WoodMizer's picture

Ah, found it.

http://www.zerohedge.com/news/much-deserved-blast-past

This guy should be the new Fed Chairman

Fri, 04/06/2012 - 10:10 | 2321966 francis_sawyer
francis_sawyer's picture

OT but:

http://usnews.msnbc.msn.com/_news/2012/04/06/11049946-self-declared-mega-millions-winner-mirlande-wilson-i-lost-the-ticket?gt1=43001

~~~

Apparently, the "winning ticket" (from that area) was purchased at a 7-11 in Baltimore on a "single ticket" (which, of course, has a timestamp), but the 7-11 cameras & the timestamp of the winning ticket do not synch up with anything...

Aside from the obvious & expected clown show of winners claiming they lost the ticket (same clain was reported from a Haitian woman in Kansas), this brings up another point... Namely, NO MATCH for timestamp & surveillance cameras? on a single ticket?

How hard would it be for the lottery to rig a huge payout & fleece the sheep once again?

 

Fri, 04/06/2012 - 10:16 | 2321983 SheepDog-One
SheepDog-One's picture

Just like in David Baldacci's book 'The Winner'....the lottery is a scam 100%.

Fri, 04/06/2012 - 11:48 | 2322283 greensnacks
greensnacks's picture

The Lottery, by Shirley Jackson was better.

Fri, 04/06/2012 - 13:55 | 2322657 Cpl Hicks
Cpl Hicks's picture

The Solar Lottery, by Philip K. Dick was even better.

Fri, 04/06/2012 - 10:43 | 2322090 artvandalai
artvandalai's picture

Anybody know what gold is doing?

Fri, 04/06/2012 - 13:14 | 2322473 slewie the pi-rat
slewie the pi-rat's picture

enormous moves on the T prices:  just what drBenZelbub ordered!  L0L!

the story of the "break" in the CDS index by theMorgueLondonPropDesk may prove blythe's "trust me" pressConf warnings of "liquidity" prescient

there are some indications of increased probability of liquidations;  how "netted out" and routine this would be is anybody's guess, but the advertiZed strength of the "systemic" elements [banks] does not exactly look encouraging;  on the other hand, we could see the bank "consolidations" looming since last month's "3-yr financing"

could be;  i don't know;  when ya see the dollar down against the EUR the CHF and the Yen, maybe all ya know for sure is that the easterBunny is comin to town...

 

Fri, 04/06/2012 - 17:33 | 2323366 devo
devo's picture

Futures now unch.

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