Bonds Up, Stocks Up, USD Up, JPY Up! Fed Up?

Tyler Durden's picture

Nothing matters - that is all. Some of the ugliest macro data we have seen in a while (apart from an 'estimated' initial claims print) and the moment the US opens - the bid is in (discounting Buffett's inflows?). It seems that the market has decided that if it quietly goes up day after day by a point here or there then noone will notice - and call it for what it is. S&P 500 has closed within a 4 point range for the last week - 1518, 1517, 1519, 1520, 1521. Financials were bid, Utilities offered, and Tech tracked AAPL up and down. Treasuries rallied notably from the open of the US day session, recoupling with stocks from yesterday's 'great rotation' sell-off. The USD leaks higher, with GBP weakness and modest JPY strength on the week, weighing on PMs further as Silver ran lower this morning (to test unchanged YTD) but bounced from the open on. VIX compressed to 12.65% and held stocks up.  Oil remains bid above $97 - handy outperfortmer on the week. So summing it up - 4 days of uber low volume, falling average trade size, gently rising stocks, flat USD, flat Treasuries, lower gold, and higher oil. And for the record, S&P options skew (complacency) is now at pre-crisis levels. 

 

Short-term realized volatility has only been this low once in the last 10 years! Each time the market has been this quiet - volatility has smashed higher shortly after...


 

The S&P 500 volume was once again well below a falling average and average trade size the lowest in weeks...

 

Oil is holding in as Gold and Silver slip..

 

Silver's dump this morning appears to be a test of the YTD unch line...

 

As the USD ends +0.2%, EUR unch and JPY regaining some much-hated strength (that we are sure Abe or his proxy will allow just through the G-20 weekend)...

 

as Bonds disappoint the rotation meme once again...


 

Charts: Bloomberg

Bonus Chart: This is the skew implied by option prices - i.e. by looking at options prices we can discern the distribution of potential returns implied by the market (as opposed to moneyness skew). This chart is interpreted simply - the higher the level, the more complacent about any downside - we are now at pre-crisis high levels of complacency!!