Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. Click here to learn more.
"... Now with:
- Inflation expectations making lower lows (5Y Breakevens = 0.94% last, lowest since May 2009) … and the trend similar across the major sovereigns
- 10Y Yields: Down another -5pbs this morning to 1.61% (lowest since the 2012 all-time lows)
- Yield Spread (10’s-2’s): 98bps last and breaching 1.0% to the downside for the 1st time since 2007
- U.S. High Yield Yields and Spreads making higher highs
- Investment grade spreads making higher highs
- High Yield Energy Debt making higher highs (yielding 20.21% as of yesterday’s higher high)
- Lending Standards tightening and domestic Loan Demand falling (latest Senior Loan Officer Survey)
- Eurodollar futures are now pricing the probability of negative rates in the U.S. by 2017 at 17% (up from 2% at the start of the year)"