Listen, yields didn’t need another excuse to fall, ok?
The flagging dollar was already doing its part by, well, by flagging, and jitters about the debt ceiling combined with lackluster incoming data had already conspired to pretty much extinguish whatever was left of the reflationary euphoria that accompanied Donald Trump’s huge, record-setting, unfathomable, big league, bigly, phenomenal election win.
Throw in the fact that tax reform is still stalled (and the guy trying to push it through is still pissed about the whole Nazi thing), ‘repeal and replace’ is literally never going to happen, and the fact that just when we thought we were going to get something constructive on infrastructure, Trump decided instead to regale us with tales of Thomas Jefferson’s slaves, and there was every reason to think that 2% on 10s wasn’t far-fetched.
Well on Tuesday, following North Korea’s latest bird-flip to the “gang of cruel robbers” in Washington and Seoul, yields hit YTD lows.
As Bloomberg notes, the 10-year yield touched 2.0841%, “falling below the previous year-to-date low of 2.1013% set in June [while] the 5Y yield also set fresh 2017 low, at 1.6675%, following a strong auction on Monday.
Both 5Y and 10Y yields are lowest since after the election in November.
Remember those “no-brainer” trades that everyone knew were crowded but piled into anyway back in January?…
Seems half a world away now, doesn’t it?
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