What is going on in the #treasury market? 10 year treasury just hit 1.13%. Yet my fair value model has it at 1.75% (incorporates Copper/Gold and other ratios - r2 of 90%+) #bonds #yields #YieldCurve 
Yet, the #ISM Manufacturing PMI is still in a highly expansionary state at 59.1
What if its actually something entirely different driving #yields down over the past several months?
What if its a combination of #RRP, @USTreasury net issuance, and #Fed treasury purchases?
What if its a combination of #RRP, @USTreasury net issuance, and #Fed treasury purchases?
US 10 year vs Treasury Net Issuance - @federalreserve purchases (6 month rolling sum)
@federalreserve Reverse Repo facility balances #RRP.
The 10 year started falling the same time this started inching up
The 10 year started falling the same time this started inching up
@USTreasury Federal General Account. Same as #RRP, #yields started falling the same time the GA started accelerating down (March 2021)
And now we have potentially have a limit is treasury issuance while the #Fed is still pumping $80bn into treasuries bloomberg.com/news/articles/…
Annnnnnnd more confirmation
bloomberg.com/news/articles/…
bloomberg.com/news/articles/…
As long as the @federalreserve continues QE and the @USTreasury is limited in issuance of treasuries (or should I say supply...), #yields should fall
And the Fair Value vs Current will continue to diverge
My plan is to wait till the r2 of my model starts to inch upward before shorting the market. Too many factors driving demand up and supply down
One caveat here is the stimulus packages (#InfrastructureBill and #reconciliation bill). Issuance will be needed and if this results in a build in the General Account, we could see yields rise really fast.
And lets not forget speculators in the treasury market #HedgeFund #ShortSqueeze #yields
bloomberg.com/news/articles/…
bloomberg.com/news/articles/…
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