Bonds' Best Day In 8 Months As Stocks Close At Record Highs

Tyler Durden's picture

Treasury curve flattening continues to gather pace as 30Y bonds rallied their most in 8 months today (even as the shorter-end sold off modestly) but on the week the flattening is dramatic to say the least. Of course, all eyes were on stocks as the Dow and S&P leaked (post European close) to new highs (and the Russell gained back yesterday's losses and some to close the week's winner +3.5%). Gold (and silver) rallied on the day back over $1200 (but closes -3% on the week). VIX followed a similar pattern to yesterday with an early drop followed by a drift higher as it's clear managers are protecting into year-end. Quad witching and rebalancing provided some fireworks into the close as volume rose and stocks slid (as Nanex noted - something broke - lots of micro-crashes/rallies) as CBOE quotes stopped with 10 minutes to go.

 

The S&P dropped notably in the last few minutes - back to VWAP..

 

The late-day chaos perhaps summed up best by Nanex...

In close up...

 

The long bond surged lower in yields today...

 

and on the week the flattening is very clear...

 

Gold rallied on the day but closed -3% on the week...

 

Stocks were well coupled with JPY crosses until the European close and then decoupled... with the closing dump seemingly attempting to recouple...

 

After yesterday's disappointing performance, the Russell 2000 surged back to take the victory on the week... (even as the Dow and S&P rolled over)...

 

But VIX tracked a similar trajectory today with protection bid all afternoon...

 

Charts: Bloomberg