Overnight saw big demand for Treasuries with futures heavily bid during the European session as the ECB backtracked on its QE promise. That strength continues this morning as the long-end of the Treasury complex rips lower in yield - despite higher than expected inflation - as traders react reflexively to the implication that higher inflation implies less room for an un-tapering Fed and thus now implies no savior for slowing real growth. As the following chart suggests - something is amiss with cross-market expectations...
JPY carry and bonds are not as excited as stocks about growth opportunities...
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As Treasury futures were well bid in the EU session...
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Charts: Bloomberg