Yo, They’re Selling The Shit Out Of Some Government Bonds

Yeah, so the cacophony of hawkish commentary from central bankers has triggered a global selloff in government bonds.

As noted earlier, bund yields are higher by goddamn 20bps since Monday – and that’s a lot considering the starting point (25bps).

Treasuries are being sold (that’s three straight days), gilt yields are higher (Carney comments), etc. etc.

You’ll note that USTs came under quite a bit of pressure about an hour ago, as 10Y and 30Y futs slid below Wednesday’s lows as volumes surged with ~100k TYU7 contracts traded in the move from 125-31 to a session low 125-19+. That drug the rest of the curve lower.


Here’s a little more color on that move from Bloomberg:

  • Move lower initially triggered as 10Y futures breached 125-28; it was extended as contract also breached 50-DMA at 125-27+ and 10Y yield moved back above 50-day trendline at 2.246%
  • Curve flattened in selloff with 5s30s dropping from 97bp to 95.5bp over a few minutes as 5Y yield approached 1.88%
  • Treasury weakness widened U.S.-German 10Y spread back through 184bp, with German 10Y cheaper by just 1.5bp on the session

And here’s a snapshot of global moves:



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5 thoughts on “Yo, They’re Selling The Shit Out Of Some Government Bonds

  1. Heisenberg – How does normalization play out? I’m in the coming deflation and lower long-term rates camp, but the fed’s normalization does appear to be a tidal wave in the opposite direction (at least with regards to rates). Where are long-term rates headed, in your view?

      1. Thanks. In agreement. A friend of mine who has researched fed and QE mechanics is long Treasury futures in anticipation, and I’m waiting for 3-3.5% 30yr before initiating my own position. Would love to post his explanation here but I don’t think he would want to be attributed.

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