We have been getting numerous queries lately what the best correlation pattern is for the most recent regime (as in post POMO, now that the Fed is once again actively involved in pricing risk) since all the traditional metrics have collapsed, whether it is FX carry funding (in the form of AUDJPY) or pure cash bonds in the form of the 10 Year. Well, we have an answer courtesy of credit trader. It appears the primary dealers are now funding their stock purchases by selling the Treasury butterfly trade: the 2s10s30s, a trade we discussed extensively over ther weekend, and purchasing ES with the proceeds. Note the almost congruent match between the two on an intraday basis. To be sure, this is an early attempt to gauge where the carry funding comes from in the most recent regime. We will likely want to see 2-3 days of confirmation before we recommend any specific arbitrage opportunities based on this relationship, but we urge our BBerg equipped readers to CIX this relationship and to keep a close eye on it.