Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today
Already have an account? log in
This Flash Crash Matters – Here’s Why
When the yen suddenly surged against damn near everything during one of the more dramatic "flash" events in recent memory just after 9:30 AM in Sydney, it wasn't too difficult to make a list of possible contributors.
The yen was already on the front foot amid the generalized risk-off mood across global markets and was tracking the ongoing rally in U.S. Treasurys pretty closely. Well, 10-year U.S. yields dove to a fresh 11-month low following the Apple guidance cut.
That probably set the stage.
There is one flash crash nobody talks about: the General Collateral rate for UST collateral on December 31 was 5.15%, 290 bps above RRP, the reverse repurchase agreement rate. Yesterday another spike occurred again.
There is something wrong somewhere, better to pay attention carefully.
Can you elaborate further about what this means and it’s ramifications, for for instance for treasury market bond ratings/stability’s? Thanks.