One Bank Offers a Radically Different Reason for the Bond Market Fireworks

from Zero Hedge

One week ago, we suggested that what was behind last week’s surreal market moves in the aftermath of Wednesday’s FOMC – which saw an unprecedented plunge in yields despite the Fed’s hawkish pivot – had little to do with the Fed pronouncement and much more to do with Friday’s huge quad-witching op-ex as well as the market’s stretched, one-sided technicals which included a record short bias among treasury traders, which forced a painful squeeze, sending prices sharply higher and sparking a buying frenzy in growth names.

But what if most of the recent move in US treasuries not only had little to do with the data or the Fed, or with the positioning technicals of the market? That’s the hypothesis proposed by Deutsche Bank’s head of credit, Jim Reid, who muses that If true, “the danger is that the market and authorities over interpret the macro conclusions and react the wrong way.”

Continue Reading at ZeroHedge.com…