U.S. Treasuries Bubble: Beginning To Burst?
By Kevin Mulhern: The trade has been talked about by many of the most reputable fund managers. People, including myself in a December 2009 article, have anticipated the top for several years now. Yet those who have been short US Treasuries have been treated to constantly declining yields. For the first time in a long time, increased slack in the Treasury market manifested itself yesterday with yields leaping upward. A 2.5 standard deviation move in 10yr yields broke the yield above the 200 DMA and was a rare example of Treasuries being more sensitive to the 'risk-on' trade than equities in the past few years. We think this seemingly minor shift in correlation strengths is an indicator of building selling pressure in Treasuries. Treasury yields have lagged as equities have rallied over the past few months, yet the general stabilization in financial markets and the macroeconomy should gradually begin to take its tollComplete Story »