In his morning note, David Rosenberg calls special attention to yesterday’s huge rally in Treasuries:The big news yesterday was the continued decline in bond yields – with the 10-
year note closing down at 2.88%, which is the lowest since April 2009. This is
critical because the Treasury market is telling a different story than equities
are…but remember which asset class really leads.
Treasury yields peaked three months before equities peaked in 2007 (June vs.
October) and bottomed three months before equities in 2008-09 (December ’08
vs. March ’09). When did Treasury yields peak this year? Try early April at
4.01% – while “hope” persists in equities we doubt that this condition will be
sustained as the weakening in the economic data points spill over into the
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