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A Liquidity-Driven Market Reacts To The Payrolls Data

Submitted by Tyler Durden on 06/07/2013 08:53 -0400

The following charts should clarify a few things with regard to 'real' money being put to work - as opposed to headline-reading, liquidity-feeding algos across every asset class - following this morning's rather hum-drum payrolls print.

A 10bps rip in 10Y yields... 1% swing in Gold, 1% swing in S&P 500, 140 pip swing in USDJPY, and a 345 point swing in Nikkei futures!!!

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Fri, 06/07/2013 - 08:54 | 3633192 HedgeAccordingly

CRUDE getting smoked like a crack pipe.. jeez. .. sad state of markets http://hedge.ly/187ezYZ

Fri, 06/07/2013 - 08:59 | 3633220 LawsofPhysics

Smoked? Is it $35 a barrel yet? Not quite (and my guess is never again).

Fri, 06/07/2013 - 09:00 | 3633226 MillionDollarBonus_

It's been a good morning. The S&P is up substantially on expectations of a solid NFP number, and up yet again on the modest beat. It will be interesting to see what the sell side analysts on Wall Street have to say about this?

Fri, 06/07/2013 - 09:06 | 3633239 Lets_Eat_Ben

"It will be interesting to see what the sell side analysts on Wall Street have to say about this?"

As interesting as: "...bla bla bla bla gulp bla bla bla...more kool-aid?"

Fri, 06/07/2013 - 09:13 | 3633292 DaddyO

And spot silver just got smashed...dropped about $.30 in a few minutes.

http://www.kitco.com/charts/livesilver.html

DaddyO

Fri, 06/07/2013 - 09:46 | 3633421 cro_maat

And this is surprising because....? I missed that bullion bank memo where they pledged never to manipulate the gold / silver markets. I am not picking on you DaddyO as you are just pointing out the obvious daily NYMEX takedown :)

Fri, 06/07/2013 - 09:05 | 3633252 eclectic syncretist

And JPM got notification yesterday to deliver another metric ton plus of gold that it doesn't have.

http://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsReport.pdf

They now need to deliver over 600,000 ounces of gold this month, but only have 413,000 registered. Looks like somebody's going to be buying a lot or a default is in the cards.

Fri, 06/07/2013 - 09:08 | 3633269 RacerX

thank goodness for those cash settlements

Fri, 06/07/2013 - 09:16 | 3633304 eclectic syncretist

Not everybody's going to get their gold, that's for sure. To better put things in perspective though, consider that the Comex has less than 1.5 million ounces of gold registered, and in the first week of this month delivery notices for over 750,000 ounces have been issued. Granted, a lot of that is simply going from one warehouse to another, but 50% of gold inventory turning over in a week is not something that occurs very often, if it ever has before!

Fri, 06/07/2013 - 09:19 | 3633310 knukles

Don't forget the GLD shares settlement option, either.

I want phyzz
How abut some GLD?
What? Are you crazy?
How about cash? I'll give you cash and then you can go buy phyzz.
What? No, I want my phyzz.
Well, I'll settle with you at spot.
What? I'll have to pay $50/oz premium for a metric ton cash settle, phyzz.
Take it or leave it.

Efficient markets, my ass.

Fri, 06/07/2013 - 09:12 | 3633280 Lets_Eat_Ben

"Looks like somebody's going to be buying a lot or a default is in the cards."

If the big specs are going to be buying a lot then another beatdown a comin'.

Per the most recent COT, many of the once large shorts have repositioned and are now long. Not all have been covered, but many have. This tells me the bottom is close but not quite here in the PM arena. Once the big boys are positioned long I think they'll try to make money all the way back up and beyond.

Fri, 06/07/2013 - 09:18 | 3633312 eclectic syncretist

Dig into the numbers and you'll find that it's JPMs customer accounts that are getting called to deliver gold to HSBC and Barclays, mostly.

Fri, 06/07/2013 - 09:20 | 3633321 knukles

"Round up the usual suspects"

Fri, 06/07/2013 - 09:18 | 3633311 firstdivision

The S&P is down substantially from its highs last month. I'll tell you what sell side is doing (I know a few), they're shitting bricks as they know there is nothing supporting the market but Fed printing. They keep praying for a Fed announcement of expanding to $100B/month to help support their thesis of "buy, buy, buy".

Fri, 06/07/2013 - 09:24 | 3633336 knukles

I had a conversation recently with a guy connected to one of the head muckety mucks at a large prominent name MF firm. He asked me if they were worried. I told him have to be if only as per money moving into lower feed fund types, if not scared shitless for a fill scale screwing debacle.
He said that was the underlying tone of the "What me worry?" line he was hearing.... not that the guy was outright scared or worried, but that the "Everything's OK" sounded suspiciously fragrant and wondrous

Fri, 06/07/2013 - 10:40 | 3633620 angel_of_joy

MDB, here's another red arrow for your collection. GFYS !

Fri, 06/07/2013 - 09:05 | 3633255 kindape

It easily could get to $35 again if central banks stop the sovereign circle-jerk. Imagine oil decline rates at $35 oil...

Fri, 06/07/2013 - 09:10 | 3633273 LawsofPhysics

Go talk to an engineer in the field, you are clueless.

Fri, 06/07/2013 - 10:59 | 3633684 El Viejo

When I patent my new chemical formula to turn salt water into crude oil I bet we see $20 a barrel.

Fri, 06/07/2013 - 09:13 | 3633284 Bearwagon

That would not change EROEI the slightest bit ...

Fri, 06/07/2013 - 09:26 | 3633344 Possible Impact

"Smoked? Is it $35 a barrel yet? Not quite (and my guess is never again)."

Depends on the size of your barrel!

(Use a 20 Gallon barrel and it would be easy...)

Fri, 06/07/2013 - 09:04 | 3633248 Bearwagon

Exactly! Smoked like crack! You know, how vastly expensive that shit is, don't you?

Fri, 06/07/2013 - 08:55 | 3633200 Obchelli

That 10 point ramp in ES futures after they almost went negative - amazing

Fri, 06/07/2013 - 08:57 | 3633211 fonzannoon

" hum-drum payrolls print"

My guess is that hum drum payrolls orint will dominate weekend news shows. Maybe the last minute of the show someone can do an editorial on how spying is bad, but necesary.

Fri, 06/07/2013 - 09:01 | 3633235 SheepDog-One

'Weekend news shows'...what are those?

Fri, 06/07/2013 - 09:00 | 3633213 LawsofPhysics

As I stated earlier, the bond market is the largest soruce of liquidity in the world. These fluctuations are far from "normal". The Fed cannot lose control here, but this is where they have the least control. Should get interesting.

Fri, 06/07/2013 - 08:59 | 3633221 Temporalist

Does "Anally Rammed" rhyme with "Centrally Planned"?

Fri, 06/07/2013 - 08:59 | 3633222 Confundido

Gold is on sale, take advantage of it....The yen just made its correction to 95 and we now move on...

Fri, 06/07/2013 - 09:00 | 3633228 razorthin

Who gives a shit. It's all bullshit. Who believes anything from this fascist, propagandizing, surveilling establishment anymore?

Fri, 06/07/2013 - 09:06 | 3633264 digalert

Who gives a shit? Since you're here on ZH, perhaps you do give a shit?

Fri, 06/07/2013 - 09:16 | 3633302 DaddyO

Who gives a shit? Since you're here on ZH, perhaps you do give a shit?

And you?

DaddyO

Fri, 06/07/2013 - 09:00 | 3633230 SheepDog-One

Totaly fake 100% manipulated markets I don't even know why anyone looks for signs of reality in it anymore. One morning, whenever they've planned for it, they'll just pull the rug out on everything again. And of course everyone will again say no one coulda seen that one coming.

Fri, 06/07/2013 - 12:44 | 3633232 timbo_em

Next time that stupid politbüro should send clearer signals to the headline-fed algos. Either above 200.000 to signal more taper talk or well below 150.000 so that bad news can be good news.

Fri, 06/07/2013 - 09:05 | 3633254 Truther