Treasury Yields Just Flash-Crashed

Treasury yields have been pressing higher all week on an unending wave of offers, despite an already record short speculative position.

However as 10Y Yields approached the Maginot Line of 3.00% today, the bond buying began and then accelerated and then turned into a mini-flash-crash, plunging yields 11bps...

Treasury futures also spiked at the same time on extreme volume...

Over 44,000 contracts in 10Y Treasury futures traded in 1 minute... As Bloomberg noted, 10 minute volume in TY futures exceeded that of both month-end and payrolls, with 185k contracts trading during the spike higher in price.

The long-end was also hit hard...

And Ultra futures spiked...

The entire curve erased the week's losses...

And as Treasury futures sold back off from their flash smash, so gold was dumped...

And stocks bounced....

But what makes this move most bizarre, is that this morning none other than Dennis Gartman said he was planning on going long Treasurys:

THE US TEN YEAR NOTE FUTURE: Volume Rises as Prices Rise and Falls as Prices Fall: The Ten Year Note has fallen back into The Box marking the 50‐62% retracement of the violent rally that began in mid‐May and ended six trading sessions ago. Further, the “Large” and “Small” Trader are hugely net short while the “Hedgers” are hugely net long and history tells us we are generally to trade with the “Hedgers” and to take the opposite side of the “Specs.” We’ve no position at this point but we are considering buying notes.

Normally, this would be a greenlight for a rout: recall Gartman covered his Treasury short just earlier this week, when the 10Y yield tumbled below 2.92%. So merely thinking about going long should have been sufficient to crash the world's biggest bond market, and yet the opposite happened.... is it time for a glitch in the matrix?

Fonte: qui