The US GDP number comes out tomorrow. Currently consensus is projected to be 2.8%. If the number comes in at 2.8% or above, that will be the second quarter where US GDP growth was above 2.5%, while the 10yr treasury was seeing yields below 2%.
Over the past few months we also were able to remove the uncertainty of an EU banking crisis. (And tomorrow's LTRO will further solidify the certainty that EU banks will not cause a financial collapse.)
So I ask the simple question, why are 10yr treasuries trading below 2%?
(Fundamentally, I have no issue with the market to move higher from current levels. After all, the markets are simply where they were prior to the EU crisis caused markets to collapse. But we need confirmation to support a thesis of multiple expansion, and the rise in the 10yr will provide that confirmation.)
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