Things are just breaking left and right in the market now.
Shortly after the 1 PM stock market close (but before the 2 PM bond market closure) we pointed out that the 2Y yield had flash crashed on what appeared to be a short seller capitulating violently. Well, something else rather remarkable happened in that brief spike in activity: as 2Y yield tumbled first below 2.58% and then below 2.56%, the 12 Month (1 Year) Treasury - 2 Year Treasury curve inverted suddenly, sliding as low as -0.02%.
(Click on image to enlarge)
As one would expect, this was yet another of those "since 2008" events, because the last time the 1Y-2Y curve inverted was during the panic of the 2008 financial crisis.
(Click on image to enlarge)
And with a massive short overhanging still waiting across the entire curve as we discussed yesterday, expect many more such "breakage" events to take place in the coming days.
Comments
Log in or sign up to join the conversation.