UPDATE: As opposed to CNBC's earlier premature note, the 10Y Treasury cash bond just broke above 3.00% for the first time in 26 months as China gets going...
We are assured by the great and good of the status quo that 10Y rates bursting through the 3.00% barrier (its highest in 26 months) will not hinder the housing recovery (as affordability plunges), slow equity buybacks (via increased cost of capital), or crush bank earnings (via AFS losses and NIM compression as the curve flattens). Bond yields are rising as a 'positive' sign for the economy... must be right? But wasn't it Steve Liesman just 2 weeks ago, amid his "best nailing it on CNBC in years", that proclaimed 10Y would hit 2.65% before 3.00%? As we warned 3 weeks ago, a move to 3.0% will create more meaningful outflows from retail and ETFs and 3.5% is the trigger for a "disorderly rotation," from risk to cash.
10Y shifts rapidly towards 3.00% for the first time since July 2011...
oh and by the way, for those who are more concerned at the 'pace' of the move, as opposed to the level of rates - this is the fastest rise in mortgage rates in 5 years...
and 2Y yields look set to close above their 200-week average - historically a huge trend change signal...
http://www.zerohedge.com/news/2013-09-05/10-year-breath-away-300-just-50bps-left-until-disorderly-rotation
We are assured by the great and good of the status quo that 10Y rates bursting through the 3.00% barrier (its highest in 26 months) will not hinder the housing recovery (as affordability plunges), slow equity buybacks (via increased cost of capital), or crush bank earnings (via AFS losses and NIM compression as the curve flattens). Bond yields are rising as a 'positive' sign for the economy... must be right? But wasn't it Steve Liesman just 2 weeks ago, amid his "best nailing it on CNBC in years", that proclaimed 10Y would hit 2.65% before 3.00%? As we warned 3 weeks ago, a move to 3.0% will create more meaningful outflows from retail and ETFs and 3.5% is the trigger for a "disorderly rotation," from risk to cash.
10Y shifts rapidly towards 3.00% for the first time since July 2011...
oh and by the way, for those who are more concerned at the 'pace' of the move, as opposed to the level of rates - this is the fastest rise in mortgage rates in 5 years...
and 2Y yields look set to close above their 200-week average - historically a huge trend change signal...
http://www.zerohedge.com/news/2013-09-05/10-year-breath-away-300-just-50bps-left-until-disorderly-rotation
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