Originally posted at Capitalstool
Yesterday I called attention to the fact that $57 billion in Treasury coupon paper was settling, and that that should put pressure on bond prices, i.e. higher yields. Sure enough. Not only did yields rise yesterday, they broke out, signaling continuing acceleration in the uptrend. You can see that clearly in the hourly chart of the 10 year yield over the past month.
But as you can see on the hourly chart of the 10 Year Treasury yield, this is nothing new. The uptrend started in early August, right around the time when a couple of Primary Dealer marketing shills (aka “analysts”) were out in the Wall Street captured media (yes you CNBC and WSJ) telling everyone to buy bonds. They said that the US economy was so weak, inflation would soon drop like a stone and the 10 year would be yielding 2%.
They are either incompetent, or liars, or both. Sometimes I think that they really believe their own marketing. But the fact is, when they have inventory to unload, they say whatever they need to, to move that inventory.
Meanwhile, I had warned for months that August would be a turning point in the Treasury market because the supply situation would then get much much worse. That wasn’t a wild guess on my part. It was based on information that is published in advance. I just follow the data, observe, and report.
It’s not rocket science.
