The Disconnect Continues

Presented with little comment - equities and bonds are diverging aggressively now as 10Y accelerates towards its all-time low yields (1.67 on 9/23). As we noted earlier, foreigners are dumping Treasuries at a record pace and yet it grinds tighter and stocks rally on USD weakness. Our 'thesis' from yesterday that a reactive Fed QE is being priced in seems the most 'sensible' but year-end flows for now are tough to call.

and its not just Treasuries (or 2s10s30s) that are derisking as CONTEXT (risk asset basket proxy) is leaking lower quite consistently...

Gold is up, EURJPY is leaking lower (FX carry) and Oil is coming off from its highs now.


Chart: Bloomberg