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Bonds & Bullion Bloodbath As Dow Dumps Into Red For 2018

Someone ask Bob Pisani if the bears are back in charge of the narrative?

Stocks were ‘triggered’ by retail sales data this morning…

And despite some roller-coastering, stocks largely trod water from the gap down open…

Dow (and Transports) tumbled into the red for 2018…

 

The Dow broke its 8-day win-streak and closed back below its 100DMA…

 

VIX mini-flash-crashed to a 12-handle on the retail-sales print then blasted higher to test a 15-handle…

 

Growth stocks bore the brunt today…

 

Treasuries were a bloodbath as yields at the long-end broke out of recent ranges…

10Y spiked…

To its highest close since July 2011…

 

30Y surged all the way to 3.22% – its long-term trendline resistance – and turned back lower…

We do note however that there is a huge amount of IG issuance this week yesterday saw over $10 billion priced, putting primary market issuance well on its way to meeting survey estimates calling for $30 billion to $35 billion in weekly sales – and that would suggest rate-locks were actively being placed.

This was the worst day for an aggregate bond and stock portfolio in over 6 weeks…and 2nd worst since the Feb chaos…

 

Bear in mind that bond yields are spiking as economic data is disappointing notably…

 

Notable decoupling between bonds and the dollar today

One final thing of note before we leave bondland, the intraday loss on today’s 10bp move (with a 10bn DV01, as detailed here) is roughly $100 billion!!!

The Dollar spiked to new cycle highs…highest since Dec 27th 2017…

 

Argentine Peso managed gains off the 25/USD floor that BCRA enforced ahead of the massive bond rollover today…

 

Cryptocurrencies lost ground against the dollar today with Bitcoin and Bitcoin Cash back flat on the week…

 

The dollar strength left a wake of damage in commodity land (though WTI held on to gains)…

 

Meanwhile, the Brent-WTI spread is at its widest since 2015…

As Bloomberg reports, U.S. oil reached $8.06 below the international benchmark Brent, the cheapest it’s been been since April 2015, when a ban on most American crude exports was still in effect. Geopolitical tensions in the wake of U.S. sanctions on Iran are boosting Brent crude near $80 a barrel, while surging U.S. shale production is keeping West Texas Intermediate in check. The spread between the two may widen to $10 a barrel, according to Walter Zimmermann, chief technical analyst at ICAP-TA. “This having the character of a panic blow-off, it’s probably going to happen pretty quickly.”

Today was an ugly one for precious metals as the dollar spiked. Gold suffered it worst day since Dec 2016, breaking back below its 200DMA and the key $1300 level…

It seems 80x for the gold/silver ratio was resistance once again…

Finally, we note that the odds of 3 or more Fed rate-hikes for the rest of the year just overtook the odds of 2 more hikes…

 

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