And the markets roar LOL...............
And indeed, as BMO's rates strategy duo of Ian Lyngen and Jon Hill notes, an extension of the grinding bid for duration was the primary development during the overnight session and it was one which has brought 30-year yields to new record lows.
With 1.907% now representing the lowest rate ever for the long bond, we remain biased for a break even lower as the final week of August continues to unfold. Similarly, the local low in 10s at 1.444% is likely to be challenged given the bullish backdrop that remains well in place for Treasuries.
This, as BMO notes, bodes well for an ongoing flattening of the yield curve, which was further observed after today's very strong 5Y auction.
But back to the outperformance of the long bond, which as Lyngen points out "has been remarkable on a number of levels and the overnight move adds even more to the bullishness." Additionally, as has been the case for much of the past month, the strong bid emerged in Asia - as Japanese and Taiwan lifers rushed to bid up the paper - and was then extended in London, suggesting a variety of pockets of demand for 30-year Treasury yields below 2.0%.
And here an important aside: as the BMO analysts point out, the 30s are now yielding less than the S&P500’s dividend yield of 1.98% - for first time since 2009 and represents "yet another potential recessionary indicator, as if more were needed to stoke concerns of a meaningful slowdown."
http://www.zerohedge.com/news/2019-08-28/bmo-we-just-got-another-recessionary-indicator-if-more-were-needed?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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