…looks like a chart of someone with a critical medical condition. But Perhaps someone has a reassuring explanation:
As you can see the market is betting the equity market will go a lot lower.
These bets can create a lot of profit while betting on losses.
In other words most of it is hedging.
From here to the end of March can get very rocky. We need to actually see what pans out.
These are the charts where the action is.
This is really very separate from the US economy. This is about diving into demand side econ in the US. The ship is turning.
Are the JP and EU traders done buying Yen and Eur? Probably not. The Japanese insurers many of them will be selling all their US paper by the end of March. If we do have spiral upward by then on the long end of the US yield curve could go nuts. If not then it wont be anything at all.
We will probably see a spiral upward in the 10 year yield.
note I am tired I have been editing for clarity.