5-Year Treasury Yield Tumbles Below 2.00% As Short-Squeeze Picks Up

Five-year Treasury yields have tumbled back below 2.00% to the lowest levels in almost three-weeks, extending the drop amid the weakest economic growth period for a rate-hike since 1980.

The yield curve has flattened dramatically in the week since The Fed hiked…

With net positioning near record high shorts, and everyone and their pet rabbit sure that a breakout above 2.15% was ‘inevitable’…

And while some of the Treasury short has covered, the massive extension of Eurodollar shorts more than offset it – leaving ‘shorts’ across the entire curve at record highs…

We wonder what happens next.