As fears of the Covid Delta Variant sink in, we are seeing a flight to quality. The 10Y-3M Treasury curve slope is declining.
But the US Treasury actives curve remains upward sloping as does the on/off the run curve.
While the US Treasury curve (green) is upward sloping and all yields above zero, Japan’s sovereign curve is negative in tenors of less than 10 years. Germany has negative sovereign yields for tenors less that 25 years.
The big three Central Banks are expanding like crazy.
The Dow in down > 900 points
Graphically, the Dow is dropping alongside 10Y Treasury yields as investors flee to quality.
Paging Fauci for a lecture of Covid and more “go big” talk from Treasury Secretary Yellen.