With US Treasury yields spiking to extreme 'cheapness' relative to Japanese and German bonds (and stock dividends) it seems a 'value' bid has re-emerged, sparking a notable drop in long-end yields (despite the ongoing collapse in the Yuan to fresh record lows). The Treasury bid is flattening the curve dramatically which in turn is knocking the exuberance out of the ridiculous spike in bank stocks.
The offshore Yuan is crashing again to fresh record lows…
But US Treasuries have decoupled from the collapse in the Yuan…
And turmoil in the Yuan never bodes well for US stocks…
But Treasuries are bid as they have become 'cheap' to various assets…
To JGBs…
To Bunds…
And to Stocks…
And as the curve flattens…
US financials are starting to slide…
Which makes sense as they are couypletely decoupled from their credit markets…
The biggest bank drop in 2 months…
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