The reaction to today’s blockbuster noise-ridden jobs data is muted in stocks but bonds are sending some complicated and uncomfortable signals. 2Y yields are 6-7bps higher and 30Y yield are now unchanged (havingbeen 4-5bps higher) as the market prices in short-term Fed action and the implicit medium-term economic weakness expected. This 6-7bps flattening of the 2s30s curve has crushed the spread to 234bps – below levels seen as Lehman failed and near Summer 2012’s cycle lows. But we are sure 2015 will be the year that rates rise… right?
The post-payrolls reaction…
and the crushing blow to the yield curve…
Charts: Bloomberg
via Zero Hedge http://ift.tt/1tZfMqq Tyler Durden