Last week we showed that the 10Y was on the cusp of breaking out above the most critical trendline of this decade. Well, following today’s largely illiquid surge in the dollar and selloff in the Treasury complex, briefly halted by the steller 7Y auction mid morning, the trendline has been officially broken.
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Time For Truth: (Zero Hedge) – The Most Important Bond Trendline Is Broken: "Now It Gets Interesting"
Buyers swarmed the two-year Treasury auction, at the same time market expectations for a Fed rate hike were building.
While many see the success of Tuesday afternoon’s auction as the result of a liquidity issue, the continued flattening of the yield curve between the two-year issue and 10-year notes could be seen as an ominous sign that the market is worried about the Fed tightening.
Sotheby’s auction house said it will proceed with the planned sale of the “Evening in Cairo” by the celebrated Russian seascape artist Ivan Aivazovsky. Moscow had earlier said the masterpiece was stolen from a private collection in 1997.