Treasury yields are at the lows of the day (despite relative equity strength) as this morning's triple whammy of weak data (CFNAI, PMI, and Existing home sales) confirms fears of Fed policy errors. The extreme short-positioning [3] across the entire Treasury complex is likely making a few nervous as 30Y yield breaks back below 3.00% for the 3rd time in 3 days.
Aggregating across the entire Treasury future complex, [3] speculators are the most next short since the end of QE1...
[4]
(NOTE: the above chart aggregates 10y-equivalent futures net positioning)
And, despite equity strength, Treasuries are rallying (yields dropping)...
[5]
With 30Y now breaking back below 3.00%...
[6]
As we noted previously, the last time the combined levels of short bonds and short VIX were this extreme was as QE1 ended in 2010... This happened next...
[7]
This could be a major problem for the "Buy Financials" narrative... 2s30s are now at the flattest in 7 months!
[8]
Charts: Bloomberg
