Markets:
- Gold down $4 to $1819
- WTI crude down $2.12 to $111.66
- US 10-year yields flat at 3.196%
- S&P 500 down 2%, Nasdaq down 3%
- USD leads, NZD lags
There was a little bit of bifurcation in markets at present as equities dumped whereas bonds traded sideways. In FX, the greenback was strongly bid whereas the yen slumped regardless of the flight to security. You would not usually count on AUD/JPY to be up 25 pips on a day when the Nasdaq fell 3%.
You additionally would not count on a powerful greenback rally to start out instantly after a poor studying on shopper confidence and from the Richmond Fed. However the greenback surged into the London repair. That and a take a look at the calendar could be a clue on what is going on on. We’re into some main quarter-end flows and Citi’s mannequin is exhibiting robust USD shopping for and that is precisely what came about at present.
The bond market continues to reel off public sale tails however they’re shrugged off with some pointing to falling Japanese demand as a result of yen drop together with excessive hedging prices. Regardless of the motive, tails that will have upended the market months in the past are ignored.
The Canadian greenback was in a position to hold tempo with USD as oil costs rose for the third day. AUD wasn’t far behind and different delicate spots like metal aren’t pointing to a world development hunch because the catalyst for a few of the strikes at present.
I would not overthink this one because it’s T-2 earlier than quarter finish for shares. Nonetheless, we’d not be on the finish of it with three extra days of buying and selling to go in Q2
