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2021-07-21

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Behind The Plunge In Yields: This Is A Growth Story, Not A Rethink Of Inflation<blockquote>收益率暴跌背后：这是一个增长故事，而不是对通胀的重新思考</blockquote>

In a notable turn of events, the overnight session saw an initial attempt at a modest reversal in th

Behind The Plunge In Yields: This Is A Growth Story, Not A Rethink Of Inflation<blockquote>收益率暴跌背后：这是一个增长故事，而不是对通胀的重新思考</blockquote>

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{"i18n":{"language":"zh_CN"},"data":{"magic":2,"id":178206819,"tweetId":"178206819","gmtCreate":1626822105531,"gmtModify":1631892646009,"author":{"id":3579772736052887,"idStr":"3579772736052887","authorId":3579772736052887,"authorIdStr":"3579772736052887","name":"Torrieslim","avatar":"https://static.tigerbbs.com/7dc8e08fa5d20245a3e4bc7629180ac0","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":11,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":1,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body>nice</body></html>","htmlText":"<html><head></head><body>nice</body></html>","text":"nice","highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/178206819","repostId":1109861258,"repostType":4,"repost":{"id":"1109861258","kind":"news","pubTimestamp":1626793354,"share":"https://www.laohu8.com/m/news/1109861258?lang=zh_CN&edition=full","pubTime":"2021-07-20 23:02","market":"us","language":"en","title":"Behind The Plunge In Yields: This Is A Growth Story, Not A Rethink Of Inflation<blockquote>收益率暴跌背后：这是一个增长故事，而不是对通胀的重新思考</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1109861258","media":"zerohedge","summary":"In a notable turn of events, the overnight session saw an initial attempt at a modest reversal in th","content":"In a notable turn of events, the overnight session saw an initial attempt at a modest reversal in the recent Treasury rally only to be met with further buying interest. The net result was a tick lower in 10-year yields that brought the benchmark to levels not seen since mid-February.<blockquote>值得注意的是，隔夜交易中，近期国债涨势出现小幅逆转的初步尝试，但却遭到了进一步的买盘兴趣。最终结果是10年期国债收益率小幅下跌，使该基准收益率达到2月中旬以来的最高水平。</blockquote> <img src=\"https://static.tigerbbs.com/48f958db8d2903a76ff6541648b287fc\" tg-width=\"1223\" tg-height=\"687\" width=\"100%\" height=\"auto\">With the next technical target sill 5 bps away, we’ll be watching the interplay between risk assets and US rates as the delta-inspired repricing continues. We’re cognizant that the severity of the recent move has led to stretched momentum measures, implying incremental gains will be more difficult to achieve. This isn’t to suggest the floor for rates is evident at the moment, rather that it should be anticipated that the pace of the rally will slow.There has been plenty of chatter surrounding the possibility 10- year yields dip below 1.0%; an eventuality that would be a short-lived endeavor, but not one that’s off the table.More immediately however, will be gauging the extent to which rising case counts can carry yields even lower from here.<blockquote>距离下一个技术目标还有5个基点，随着delta引发的重新定价继续，我们将关注风险资产与美国利率之间的相互作用。我们认识到，最近走势的严重性导致动量措施捉襟见肘，这意味着增量收益将更加难以实现。这并不是说目前利率的底部很明显，而是应该预计反弹的步伐将会放缓。围绕10年期国债收益率跌破1.0%的可能性有很多讨论；这将是一个短暂的努力，但不是不可能的。然而，更直接的是衡量病例数的增加在多大程度上会导致收益率进一步下降。</blockquote> It would be an oversimplification to conclude this move is entirely a function of the economic risks posed by the reinstatement of covid-19 restrictions. In fact, we’ll argue the rally has been exaggerated by the Fed’s most recent efforts to be less dovish.Policymakers are in the pre-meeting radio period of radio silence; which eliminates the potential for any official commentary on the Fed’s take on the renewed pandemic risks. Moreover,it leaves investors operating under the assumption that 1) tapering is still on track, 2) rate hikes as early as next year could come to fruition, and 3) the Fed’s ‘will act if not transitory’ stance on inflation remains value. While these surely still hold true to some extent, the implied commitment may be waning given investors’ response to the recent covid developments.<blockquote>如果断定此举完全是恢复新冠肺炎限制所带来的经济风险，那就过于简单化了。事实上，我们认为美联储最近不那么鸽派的努力夸大了涨势。政策制定者正处于会前无线电静默期；这消除了对美联储应对新一轮大流行风险的任何官方评论的可能性。而且，它让投资者在以下假设下进行操作：1）缩减仍在正轨上，2）最早明年加息可能实现，以及3）美联储对通胀的“如果不是暂时的，也会采取行动”的立场仍然有效.虽然这些在某种程度上肯定仍然成立，但鉴于投资者对最近新冠疫情发展的反应，隐含的承诺可能正在减弱。</blockquote> Headlines this morning conclude ‘markets no longer worried about inflation’; a notion, which is ostensibly consistent with the price action in US rates, misses the mark.10-year breakevens are still at 225 bp and a distance away from the mid-June lows.In addition, rising supply-driven inflation that functions as a tax on consumption as opposed to a reflection of a healthy real economy creates downside risks for the recovery. When combined with concerns that H1 will represent the peak of the rebound, it follows intuitively that the market has moved on to trading the next stage in the cycle – i.e. recalibrating growth expectations in reflecting the new norm; one in which herd immunity will prove elusive and variant risks (delta and others) become an ongoing concern.A quick glance at real yields near -100 bp reinforces the read that this is a growth story, not a collective rethink of reflation.<blockquote>今天早上的头条新闻得出的结论是“市场不再担心通货膨胀”；一个表面上与美国利率价格走势一致的概念没有抓住要点。10年期盈亏平衡点仍为225个基点，距离6月中旬的低点还有一段距离。此外，供应驱动的通胀上升，其作用是对消费征税，而不是反映健康的实体经济，给复苏带来了下行风险。当结合对H1将代表反弹峰值的担忧时，直观地得出市场已经转向周期的下一阶段交易——即重新调整增长预期以反映新常态；在这种情况下，群体免疫将被证明是难以捉摸的，变异风险（德尔塔和其他）将成为一个持续的问题。快速浏览一下接近-100个基点的实际收益率，就会强化这样的解读：这是一个增长故事，而不是对通货再膨胀的集体反思。</blockquote> There is yet another nuance of the price action that merits highlighting. Specifically, the move thus far has questionably been a flattening event as 10s and 30s outperform. The front end of the curve has benefited to a lesser extent as monetary policy expectations have remained in place.This morning however, we’re starting to see the 5-year sector lead the rally. In the event we’re seeing the transition from a longer-term growth story to further pricing out Fed tightening, this could ultimately serve to moderate the gains in 10s and 30s.This isn’t to suggest that less room for the FOMC to eventually normalize policy rates is a compelling reason to sell duration in the face of a resurgence of the pandemic. Instead, confidence that monetary policymakers won’t be so eager to respond to pockets of reflation given the renewed headwinds facing the global recovery<blockquote>价格走势还有另一个细微差别值得强调。具体来说，到目前为止，由于10岁和30岁的表现优于大盘，这一走势值得怀疑。由于货币政策预期仍在，曲线前端受益程度较小。然而，今天早上，我们开始看到5年期板块领涨。如果我们看到从长期增长故事过渡到进一步定价美联储紧缩政策，这最终可能会减缓10年和30年的涨幅。这并不是说，面对疫情卷土重来，联邦公开市场委员会最终使政策利率正常化的空间较小是卖出久期的令人信服的理由。相反，鉴于全球复苏面临新的阻力，人们相信货币政策制定者不会如此急于应对部分再通胀</blockquote> We’ll be tracking this particular evolution in the nature of the bullish repricing if, for no other reason,it will be instrumental in gauging what to anticipate in response to next week’s FOMC meeting and Powell’s press conference.Note that in light of the +8.1% consensus estimate for next week’s release of Q2 real GDP, there is little question that a strong rebound in H1 is priced in and investors have shifted toward trading the next stage in the recovery that contains far greater uncertainties.<blockquote>如果没有其他原因，我们将跟踪看涨重新定价性质的这种特殊演变，这将有助于衡量下周FOMC会议和鲍威尔新闻发布会的预期。请注意，鉴于对下周发布的Q2实际GDP的普遍预期为+8.1%，毫无疑问，H1的强劲反弹已被消化，投资者已转向交易包含更大不确定性的复苏的下一阶段。</blockquote> If the move in real yields is any indication there is growing angst on the rebound; 10-year real rates reached their lowest level since early January and within striking distance of the cycle low at -112.4 bp.<blockquote>如果实际收益率的变动表明人们对反弹的担忧越来越大；10年期实际利率达到1月初以来的最低水平，距离周期低点-112.4个基点不远。</blockquote> <img src=\"https://static.tigerbbs.com/add9a9864bc513a7f99d365620818f07\" tg-width=\"1223\" tg-height=\"687\" width=\"100%\" height=\"auto\">The decline in reals is made all the more noteworthy given the proximity to Thursday’s $16 bn new issue 10-year TIPS auction. Current valuations demonstrate not only increasing worry on the spread of the delta variant domestically, but perhaps more consequentially, overseas. Whereas there was once a time when the US rates landscape was solely dictated by the domestic fundamentals, the globalization of the economy and markets now leave Treasury yields a function of the global backdrop. This helps account for the impressive round of bullishness and durability of the bid for USTs even as the data has generally continued to perform well. We’re reminded of the time tested adage that resistance hardly holds on the third attempt, and will monitor the -112 bp line in the sand in 10-year real yields over the balance of the week.<blockquote>鉴于周四即将举行160亿美元的新发行10年期TIPS拍卖，雷亚尔的下跌变得更加值得注意。目前的估值不仅表明人们对德尔塔变异毒株在国内蔓延的担忧日益加剧，而且或许更重要的是，在海外蔓延。曾经有一段时间，美国利率格局完全由国内基本面决定，而经济和市场的全球化现在使美国国债收益率成为全球背景的函数。这有助于解释对UST的一轮令人印象深刻的看涨和持久性，尽管数据总体上继续表现良好。我们想起了久经考验的格言：第三次尝试阻力几乎不成立，并将在本周剩余时间内监测10年期实际收益率的-112个基点线。</blockquote>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Behind The Plunge In Yields: This Is A Growth Story, Not A Rethink Of Inflation<blockquote>收益率暴跌背后：这是一个增长故事，而不是对通胀的重新思考</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBehind The Plunge In Yields: This Is A Growth Story, Not A Rethink Of Inflation<blockquote>收益率暴跌背后：这是一个增长故事，而不是对通胀的重新思考</blockquote>\n</h2>\n<h4 class=\"meta\">\n\nzerohedge2021-07-20 23:02\n\n</h4>\n</header>\n<article>\nIn a notable turn of events, the overnight session saw an initial attempt at a modest reversal in the recent Treasury rally only to be met with further buying interest. The net result was a tick lower in 10-year yields that brought the benchmark to levels not seen since mid-February.<blockquote>值得注意的是，隔夜交易中，近期国债涨势出现小幅逆转的初步尝试，但却遭到了进一步的买盘兴趣。最终结果是10年期国债收益率小幅下跌，使该基准收益率达到2月中旬以来的最高水平。</blockquote> <img src=\"https://static.tigerbbs.com/48f958db8d2903a76ff6541648b287fc\" tg-width=\"1223\" tg-height=\"687\" width=\"100%\" height=\"auto\">With the next technical target sill 5 bps away, we’ll be watching the interplay between risk assets and US rates as the delta-inspired repricing continues. We’re cognizant that the severity of the recent move has led to stretched momentum measures, implying incremental gains will be more difficult to achieve. This isn’t to suggest the floor for rates is evident at the moment, rather that it should be anticipated that the pace of the rally will slow.There has been plenty of chatter surrounding the possibility 10- year yields dip below 1.0%; an eventuality that would be a short-lived endeavor, but not one that’s off the table.More immediately however, will be gauging the extent to which rising case counts can carry yields even lower from here.<blockquote>距离下一个技术目标还有5个基点，随着delta引发的重新定价继续，我们将关注风险资产与美国利率之间的相互作用。我们认识到，最近走势的严重性导致动量措施捉襟见肘，这意味着增量收益将更加难以实现。这并不是说目前利率的底部很明显，而是应该预计反弹的步伐将会放缓。围绕10年期国债收益率跌破1.0%的可能性有很多讨论；这将是一个短暂的努力，但不是不可能的。然而，更直接的是衡量病例数的增加在多大程度上会导致收益率进一步下降。</blockquote> It would be an oversimplification to conclude this move is entirely a function of the economic risks posed by the reinstatement of covid-19 restrictions. In fact, we’ll argue the rally has been exaggerated by the Fed’s most recent efforts to be less dovish.Policymakers are in the pre-meeting radio period of radio silence; which eliminates the potential for any official commentary on the Fed’s take on the renewed pandemic risks. Moreover,it leaves investors operating under the assumption that 1) tapering is still on track, 2) rate hikes as early as next year could come to fruition, and 3) the Fed’s ‘will act if not transitory’ stance on inflation remains value. While these surely still hold true to some extent, the implied commitment may be waning given investors’ response to the recent covid developments.<blockquote>如果断定此举完全是恢复新冠肺炎限制所带来的经济风险，那就过于简单化了。事实上，我们认为美联储最近不那么鸽派的努力夸大了涨势。政策制定者正处于会前无线电静默期；这消除了对美联储应对新一轮大流行风险的任何官方评论的可能性。而且，它让投资者在以下假设下进行操作：1）缩减仍在正轨上，2）最早明年加息可能实现，以及3）美联储对通胀的“如果不是暂时的，也会采取行动”的立场仍然有效.虽然这些在某种程度上肯定仍然成立，但鉴于投资者对最近新冠疫情发展的反应，隐含的承诺可能正在减弱。</blockquote> Headlines this morning conclude ‘markets no longer worried about inflation’; a notion, which is ostensibly consistent with the price action in US rates, misses the mark.10-year breakevens are still at 225 bp and a distance away from the mid-June lows.In addition, rising supply-driven inflation that functions as a tax on consumption as opposed to a reflection of a healthy real economy creates downside risks for the recovery. When combined with concerns that H1 will represent the peak of the rebound, it follows intuitively that the market has moved on to trading the next stage in the cycle – i.e. recalibrating growth expectations in reflecting the new norm; one in which herd immunity will prove elusive and variant risks (delta and others) become an ongoing concern.A quick glance at real yields near -100 bp reinforces the read that this is a growth story, not a collective rethink of reflation.<blockquote>今天早上的头条新闻得出的结论是“市场不再担心通货膨胀”；一个表面上与美国利率价格走势一致的概念没有抓住要点。10年期盈亏平衡点仍为225个基点，距离6月中旬的低点还有一段距离。此外，供应驱动的通胀上升，其作用是对消费征税，而不是反映健康的实体经济，给复苏带来了下行风险。当结合对H1将代表反弹峰值的担忧时，直观地得出市场已经转向周期的下一阶段交易——即重新调整增长预期以反映新常态；在这种情况下，群体免疫将被证明是难以捉摸的，变异风险（德尔塔和其他）将成为一个持续的问题。快速浏览一下接近-100个基点的实际收益率，就会强化这样的解读：这是一个增长故事，而不是对通货再膨胀的集体反思。</blockquote> There is yet another nuance of the price action that merits highlighting. Specifically, the move thus far has questionably been a flattening event as 10s and 30s outperform. The front end of the curve has benefited to a lesser extent as monetary policy expectations have remained in place.This morning however, we’re starting to see the 5-year sector lead the rally. In the event we’re seeing the transition from a longer-term growth story to further pricing out Fed tightening, this could ultimately serve to moderate the gains in 10s and 30s.This isn’t to suggest that less room for the FOMC to eventually normalize policy rates is a compelling reason to sell duration in the face of a resurgence of the pandemic. Instead, confidence that monetary policymakers won’t be so eager to respond to pockets of reflation given the renewed headwinds facing the global recovery<blockquote>价格走势还有另一个细微差别值得强调。具体来说，到目前为止，由于10岁和30岁的表现优于大盘，这一走势值得怀疑。由于货币政策预期仍在，曲线前端受益程度较小。然而，今天早上，我们开始看到5年期板块领涨。如果我们看到从长期增长故事过渡到进一步定价美联储紧缩政策，这最终可能会减缓10年和30年的涨幅。这并不是说，面对疫情卷土重来，联邦公开市场委员会最终使政策利率正常化的空间较小是卖出久期的令人信服的理由。相反，鉴于全球复苏面临新的阻力，人们相信货币政策制定者不会如此急于应对部分再通胀</blockquote> We’ll be tracking this particular evolution in the nature of the bullish repricing if, for no other reason,it will be instrumental in gauging what to anticipate in response to next week’s FOMC meeting and Powell’s press conference.Note that in light of the +8.1% consensus estimate for next week’s release of Q2 real GDP, there is little question that a strong rebound in H1 is priced in and investors have shifted toward trading the next stage in the recovery that contains far greater uncertainties.<blockquote>如果没有其他原因，我们将跟踪看涨重新定价性质的这种特殊演变，这将有助于衡量下周FOMC会议和鲍威尔新闻发布会的预期。请注意，鉴于对下周发布的Q2实际GDP的普遍预期为+8.1%，毫无疑问，H1的强劲反弹已被消化，投资者已转向交易包含更大不确定性的复苏的下一阶段。</blockquote> If the move in real yields is any indication there is growing angst on the rebound; 10-year real rates reached their lowest level since early January and within striking distance of the cycle low at -112.4 bp.<blockquote>如果实际收益率的变动表明人们对反弹的担忧越来越大；10年期实际利率达到1月初以来的最低水平，距离周期低点-112.4个基点不远。</blockquote> <img src=\"https://static.tigerbbs.com/add9a9864bc513a7f99d365620818f07\" tg-width=\"1223\" tg-height=\"687\" width=\"100%\" height=\"auto\">The decline in reals is made all the more noteworthy given the proximity to Thursday’s $16 bn new issue 10-year TIPS auction. Current valuations demonstrate not only increasing worry on the spread of the delta variant domestically, but perhaps more consequentially, overseas. Whereas there was once a time when the US rates landscape was solely dictated by the domestic fundamentals, the globalization of the economy and markets now leave Treasury yields a function of the global backdrop. This helps account for the impressive round of bullishness and durability of the bid for USTs even as the data has generally continued to perform well. We’re reminded of the time tested adage that resistance hardly holds on the third attempt, and will monitor the -112 bp line in the sand in 10-year real yields over the balance of the week.<blockquote>鉴于周四即将举行160亿美元的新发行10年期TIPS拍卖，雷亚尔的下跌变得更加值得注意。目前的估值不仅表明人们对德尔塔变异毒株在国内蔓延的担忧日益加剧，而且或许更重要的是，在海外蔓延。曾经有一段时间，美国利率格局完全由国内基本面决定，而经济和市场的全球化现在使美国国债收益率成为全球背景的函数。这有助于解释对UST的一轮令人印象深刻的看涨和持久性，尽管数据总体上继续表现良好。我们想起了久经考验的格言：第三次尝试阻力几乎不成立，并将在本周剩余时间内监测10年期实际收益率的-112个基点线。</blockquote>\n<div class=\"bt-text\">\n\n\n 来源：<a href=\"https://www.zerohedge.com/markets/behind-plunge-yields-growth-story-not-rethink-inflation?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29\">zerohedge</a>\n为提升您的阅读体验，我们对本页面进行了排版优化\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".IXIC":"NASDAQ Composite","SPY":"标普500ETF",".DJI":"道琼斯",".SPX":"S&P 500 Index"},"source_url":"https://www.zerohedge.com/markets/behind-plunge-yields-growth-story-not-rethink-inflation?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1109861258","content_text":"In a notable turn of events, the overnight session saw an initial attempt at a modest reversal in the recent Treasury rally only to be met with further buying interest. The net result was a tick lower in 10-year yields that brought the benchmark to levels not seen since mid-February.\nWith the next technical target sill 5 bps away, we’ll be watching the interplay between risk assets and US rates as the delta-inspired repricing continues. We’re cognizant that the severity of the recent move has led to stretched momentum measures, implying incremental gains will be more difficult to achieve. This isn’t to suggest the floor for rates is evident at the moment, rather that it should be anticipated that the pace of the rally will slow.There has been plenty of chatter surrounding the possibility 10- year yields dip below 1.0%; an eventuality that would be a short-lived endeavor, but not one that’s off the table.More immediately however, will be gauging the extent to which rising case counts can carry yields even lower from here.\nIt would be an oversimplification to conclude this move is entirely a function of the economic risks posed by the reinstatement of covid-19 restrictions. In fact, we’ll argue the rally has been exaggerated by the Fed’s most recent efforts to be less dovish.Policymakers are in the pre-meeting radio period of radio silence; which eliminates the potential for any official commentary on the Fed’s take on the renewed pandemic risks. Moreover,it leaves investors operating under the assumption that 1) tapering is still on track, 2) rate hikes as early as next year could come to fruition, and 3) the Fed’s ‘will act if not transitory’ stance on inflation remains value. While these surely still hold true to some extent, the implied commitment may be waning given investors’ response to the recent covid developments.\nHeadlines this morning conclude ‘markets no longer worried about inflation’; a notion, which is ostensibly consistent with the price action in US rates, misses the mark.10-year breakevens are still at 225 bp and a distance away from the mid-June lows.In addition, rising supply-driven inflation that functions as a tax on consumption as opposed to a reflection of a healthy real economy creates downside risks for the recovery. When combined with concerns that H1 will represent the peak of the rebound, it follows intuitively that the market has moved on to trading the next stage in the cycle – i.e. recalibrating growth expectations in reflecting the new norm; one in which herd immunity will prove elusive and variant risks (delta and others) become an ongoing concern.A quick glance at real yields near -100 bp reinforces the read that this is a growth story, not a collective rethink of reflation.\nThere is yet another nuance of the price action that merits highlighting. Specifically, the move thus far has questionably been a flattening event as 10s and 30s outperform. The front end of the curve has benefited to a lesser extent as monetary policy expectations have remained in place.This morning however, we’re starting to see the 5-year sector lead the rally. In the event we’re seeing the transition from a longer-term growth story to further pricing out Fed tightening, this could ultimately serve to moderate the gains in 10s and 30s.This isn’t to suggest that less room for the FOMC to eventually normalize policy rates is a compelling reason to sell duration in the face of a resurgence of the pandemic. Instead, confidence that monetary policymakers won’t be so eager to respond to pockets of reflation given the renewed headwinds facing the global recovery\nWe’ll be tracking this particular evolution in the nature of the bullish repricing if, for no other reason,it will be instrumental in gauging what to anticipate in response to next week’s FOMC meeting and Powell’s press conference.Note that in light of the +8.1% consensus estimate for next week’s release of Q2 real GDP, there is little question that a strong rebound in H1 is priced in and investors have shifted toward trading the next stage in the recovery that contains far greater uncertainties.\nIf the move in real yields is any indication there is growing angst on the rebound; 10-year real rates reached their lowest level since early January and within striking distance of the cycle low at -112.4 bp.\nThe decline in reals is made all the more noteworthy given the proximity to Thursday’s $16 bn new issue 10-year TIPS auction. Current valuations demonstrate not only increasing worry on the spread of the delta variant domestically, but perhaps more consequentially, overseas. Whereas there was once a time when the US rates landscape was solely dictated by the domestic fundamentals, the globalization of the economy and markets now leave Treasury yields a function of the global backdrop. This helps account for the impressive round of bullishness and durability of the bid for USTs even as the data has generally continued to perform well. We’re reminded of the time tested adage that resistance hardly holds on the third attempt, and will monitor the -112 bp line in the sand in 10-year real yields over the balance of the week.","news_type":1,"symbols_score_info":{".IXIC":0.9,".DJI":0.9,".SPX":0.9,"SPY":0.9}},"isVote":1,"tweetType":1,"viewCount":2653,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":4,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}