The 10 year Treasury yield breached the famous 3%pa. Time to run? Not…yet.
The movement seems more technical than real – almost moved by algo trading.
Even spookier is the 2 year US Treasury yield at 2.49% (think about it…very hard for the SP500 not to generate more than 3% in a decade…..but much more possible for the SP500 not to generate 2.5%!).
In 2006 2007 it arrived to close to 5% (and people said that there was NO WARNING for the crisis. People simply did not know where to look).
We are not there (to the cliff)…but close by.
A rise in yield definitely favors the European financials.
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