Things for the Treasury sure aren't looking pretty. With the 10 year about to break 3% outright, the 2s10s chart has just passed pre-Quantitative Easing levels. With Treasury supply really starting to ramp up, this could be a bad sign for agencies and mortgage rates. This happens as the TIPS auction is largely oversubscribed. Seems that the market is happy to jump over the next 2-3 years of deflation and is looking straight at 2013.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgx8Wj4z5bIxcc-9Zjz571d48yHH0Ov74R6_zvpoyxda7q2BQWDF71lpeOsdGhHyehwkYKyJFJbeY4hERdPG8IeihyphenhyphenoOJHRSANonuCrGaorx24rY8gGXLRvpARcLChAk6DxrG7-vjeN2TE/s400/2s10s+4.24.09.gif)
Another interesting observation is that
overnight Commercial Paper rates are spiking, in line with the most recent market top on April 17.
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