Weird goings on in the T bond market, with the 10-5 curve rising slightly but the 10-2 dropping hard. Might it have something to do with poor 2 year auction demand? This looks like a gap up from yesterday and a sag today (along with 10′s and 5′s). To me, SHY continues to be a buy with yields up and a positive CoT structure for the 2 year Note.
10, 5 & 2yr yields from Bloomberg
Here’s the state of the yield curve compliments of Treasury…
Current yield curve from DoT
