2s10s

2s10s

Trader: "We Need Another 20 Basis Points For The Entire Narrative To Change"

"The 2s10s spread can bear-flatten through last year’s low to accomplish the break, but I don’t think you get the dollar motoring unless the yield curve holds these levels and bear- steepens. Traders will set the bar kind of low and start getting excited if 10-year yields can breach 2.23%. But at the end of the day we need another 20 basis points for the entire narrative to change."

One Trader's Advice To Bond Bears: "Come Up With Something New"

"U.S. Treasury bears haven’t come up with a compelling new argument in months, nor a reason why any of the old, stale logic will suddenly become valid now.... if current yields are supposedly unsustainable, then all the evidence points to the fact that they need to come lower if anything."

Citi Warns 'Inversion' Looms As Treasury Yield Curve Slumps To 8-Month Lows

Since The Fed began its 'tightening cycle' in December 2015, the Treasury yield curve (2s10s) has flattened dramatically, tumbling back today towards cycle lows (and well below Trump-election-hope lows). What is perhaps more worrisome is the historical trend strongly suggests this trend is far from over and an inverted yield curve looms.

RBC's Mean Reversion Model Is "Exploding Higher" As The "Rotation" Begins

Amid yesterday's "nothing-burger" from the big-three event risks, the market initially shrugged off any worries. However, as RBC's head of cross-asset strategy, Charlie McElligott notes, "all of the juicy stuff continues to occur under the surface within the US equities complex."

WTF Chart Of The Day: Yield Curve Collapses To 9-Month Lows As Stocks Hit Record Highs

With yields plunging to 2017 lows, the Treasury curve has collapsed with 2s30s at its flattest since early September (and 2s10s at its flattest since early October). This, as Gary Cohn noted, reflects bond investors' poor outlooks for longer-term growth... which, with equity markets at record highs, is entirely missing from stock investors' minds.

May Payrolls Preview: The Tiebreaker

After a poor March jobs report, followed by an April scorcher, the May payrolls report due at 8:30am on Friday will be the tiebreaker, not only for the current state of the economy where both soft and hard data have been deteriorating in recent weeks, but perhaps also for the June rate hike decision, which as the Fed noted in its May FOMC minutes, may not take place without "evidence" that the recent "transitory weakness" in the economy is over.

RBC: "The Entire World Is Long Tech, Short Energy, And Now It Gets Interesting"

"Everybody in the equities-universe it seems is aware of this dynamic, and fundamental folks are increasingly nervous about the potential for a reversal in mega ‘pain trade’ style—because it seems the entire world is ‘LONG TECH AGAINST SHORT ENERGY’…people are ready to pounce on this trade."