Yield spreads are flattening today, with both the 10 and the 2 up but the 2 up more. Today’s implication (again, let’s not take any single day outside of its bounds) is a lurch to risk ‘ON’ as money comes out of short-term T bonds faster than long term T bonds.
Where was the only place on the internet (or in finance in general for that matter) that you saw a down arrow placed on the 30 year yield amidst all the hoopla about a great rotation out of bonds and into stocks, with it being only a matter of time before yields went much higher?
That’s what I thought. Oh but wait, charts don’t work they say.
I’ve got the Continuum declining to about 3% to 3.2% or so before reversal.
Today the curve is up just a bit with both the 10′s and 2′s down in yield. With the 2′s down more than 10′s, the implication is that players are still lurching toward liquidity and risk ‘OFF’.
Here’s the state of the thing on the big picture at yesterday’s close…
Yields are up with the curve flattening in a gold unfriendly manner today.
The spread between 10′s and 2′s is widening again today and that is good for gold and not so good for the stuff most people cheer for, like the stock market and US economy. Again, I remind you that no one day should be taken in a vacuum, but this is now two days in a row of Yield curve strength strung together.
Yield spreads are up big this morning, with the 2 year down hard and the 10 not nearly so much. It’s a positive alignment for the precious metals and for the regular market? Not so much today…
This morning’s micro management shows the 10 year to 2 year curve is bumping up as of 8:00 US ET, as 10′s drop less than 2′s.
The status of T bond yield spreads is not in a gold friendly posture today. Again I say try not to take any one day’s data point in a vacuum. But it is what it is and with short term yields rising faster than long term yields, it’s not gold positive in this little moment in time. Tomorrow? Maybe another story. Who knows in this casino?