thoughts on markets pre- and post CPI

first, the tilt in CBOT futures

We have 2 isolated lows in the long bond if today’s range settles in the upper quartile. A new high and range extension would affirm strong rejection below 109-00. Richard Farina said it well in 1965, “been down so long it looks like up to me.”

This chart is from April 2010 to present and Ultras are trading well under the lowest monthly prices in the CQG data base.

The 2 year note is mildly positive after 4 years of relentless technical pressure. In the market-speak lexicon preferred by the new Chair, this market has been leaning dovish since the last FOMC meeting on July 28.

Going all the way back to the GFC the 2 year note is about equal to where it was trading at the start of the stat-arb meltdown in the summer of August 2007.