This Is How Rate Accidents Start
Shhh… it’s back.
The US 10-year is closing in on the key 4.2% level. A sustained break above it risks reigniting the squeeze.
Source: LSEG Workspace
Breaking out
The 30 year pushing above the negative trend line. Haven't seen the long end trade here since the early September puke in rates.
Source: LSEG Workspace
SPX vs rates
Gaps are getting very wide... SPX vs. the 10 year (inverted) and the 30 year (inverted).
Source: LSEG Workspace
Source: LSEG Workspace
Pulling us higher
Gentle reminder of what Albert Edwards pointed out regarding the Japanese/US 10 year spread not long ago: "...these opposing forces are extreme... and unlikely to coexist for long."
Source: LSEG Workspace
Et tu Europe
European long end at massive levels. Close this slightly higher and we could squeezy violently higher.
Source: LSEG Workspace
Remember FOMO momos?
Recall when the crowd was busy chasing Australian 100 year bonds a few years back? Well, its down 76%, printing new lows.
Source: BofA
Forgotten?
Bond volatility has reset post FOMC and stays at rather depressed levels, but there is a bigger picture unfolding in rates. MOVE is not pricing this according to us.
