US Treasuries opened just over an hour ago and are now trading considerably lower in yield. 10Y yields are under 1.84%, their lowest since February 3rd and within a few bps of ther 1.7959% yield lows of mid-December which would all but guarantee a return to the September 2012 2011 low yields. More critically for all those QE-hopers, the massive divergence which we have been vociferously arguing as unsustainable between 10Y yields and the S&P 500 has how collapsed and converged perfectly. From last Tuesday's Bernanke press-conference when he hinted (albeit hedged with chatter of recklessness) that QE was still on the table (which we argued meant that - should the entire world suddenly go pear-shaped, we will step in but until then we are on hold), US equities decided that they should forget fundamentals once again and simply bid the market on nominal price improvement based on fiat-debasement - which enabled a 50 point divergence from reality- which has now completely converged and in fact S&P futures are now 10-15points below the pre-Bernanke-week-hope lows.
10Y Yields are at 3-month lows...
[4]
As a reminder, not only are macro data serially disappointing (or simply Schrodinger-ing where impossible to fudge) but while earnings may be interpreted by many as good for Q1 they are merely reflexively biased from a reduced expectation going in and more critically (for those investors who don't have a time-machine - everyone except Tilson), although these quarterly earnings look positive they have done nothing to change 2012 overall EPS estimates as the back-end remains heavily hoped hyped loaded.
[5]
Broadly-speaking, US equity futures, Treasuries, and FX markets have stabilized at somewhat convergent levels for now and as the Yuan depreciates (that's the opposite of appreciates Senator Schumer) the most in 3 weeks, we await Europe's open for the real derisking action to begin (especially as we remind readers of the drying-up of collateral for any new ECB funding shenanigans - most notably for the worst nations such as Spain as we noted here [6]).
Charts: Bloomberg