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Bond Yields Plunge Most In 10 Months As Stocks BTFEscalation

Tyler Durden's picture




 

After surging all week on the worst volume of the year, US equities hit an air-pocket of reality this morning as last night's news of a Russian 'invasion' was confirmed by Ukraine (and UK reporters), denied by Russia, and met with silence from the US. Of course, thanks to a handy VIXnado, stock bounced back to VWAP, stabilized and closed the week in the green. The last two weeks have been the best for 7Y bonds in 10 months as it closes back under 2% for the first time since Oct 2013. Amid all this chaos, the US dollar closed unchanged on the week (giving up mid-week gains) as AUD and CAD strength dominated EUR weakness. Gold and silver - after a quiet week - was clubbed lower in the pre-open. Gold and oil surged higher on the Ukraine news - closing marginally lower on the week. VIX was cranked down to an 11 handle before Ukraine hit, surged back over 14.5, then jerked lower to close 'weaker' than stocks imply. Once again, US stocks surged once Europe closed (and of course, the panic buying into close makes perfect sense).

2014 so far... for some context.. HY unchanged, Treasuries +15.6%, Gold +8.2%, S&P +6%

 

Today was all about Option Expiration... the geoplitical plunge was trumped by machines need to get back to pin levels for options... hence the VWAP attractor in S&P futures today...

 

Say thank you AUDJPY...

 

As one 'smart chap' on TV said "people just wanna be long" - we assume he means bonds...

 

Now where have seen that before?

 

On the day, the Nasdaq managed to close Green - because you BTFEsclation... and The Dow and S&P closed unchanged

 

But notably from when the actual "invasion" news hit last night, stocks are also positive (having tested that level intrday)...

 

All indices close green on the week...

 

VIX had a wild ride on the week (OPEX so expected) but notably diverged into the weekend...

 

Treasury yields were a one-way street lower this week... 7Y under 2% - lowest in 10 months, 10Y 2.30% - lowest in 14 months, 30Y 3.10% - lowest in 15 months

 

FX markets were volatile on the week but the USD Index ended unchanged...

 

Commodities in the last 2 days have been very volatile... both oil and gold roundtripping

 

Interesting divergence (again) between gold and silver...

 

Charts: Bloomberg

Bonus Chart: JCPandemonium... it seems - as CDS suggested - that JCP is not fixed... -12.5% from AH highs last night

 

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Fri, 08/15/2014 - 16:11 | 5099413 ebworthen
ebworthen's picture

Beep-boop-beep.

Skynet is going to have a clean 220V digital martini tonight; two olives 0101.

Fri, 08/15/2014 - 16:19 | 5099450 Say What Again
Say What Again's picture

By the end of the day most of the market were close to unchanged.

Go figure.

 

As one 'smart chap' on TV said "people just wanna be long" - we assume he means bonds...

There is another plausible interpretation to that comment.

Fri, 08/15/2014 - 16:20 | 5099477 max2205
max2205's picture

Just unfuckingbeleivable

Fri, 08/15/2014 - 20:32 | 5100502 philipat
philipat's picture

This is just OTT. There is simething happening behind the curtain? Although, I suppose if "Money" is unlimited from thin air this might still continue for a while yet.

Fri, 08/15/2014 - 16:22 | 5099494 Rainman
Rainman's picture

Bonds sure gave me a long woody this week. Bravo for mayhem !

Fri, 08/15/2014 - 18:13 | 5099972 SAT 800
SAT 800's picture

took profit today on my short jpy Y from o5/11; +$1312.50. Not really performing. Put on another Short on the Dec. GBP; which is performing. So I have a pair of those now; with a center at 1.6807.

Fri, 08/15/2014 - 18:16 | 5099987 SAT 800
SAT 800's picture

Regarding the Silver price with disbelief until Monday; If it doesn't improve I'll have to sell my recent positions at $19.900; long. basis Dec.

Fri, 08/15/2014 - 16:10 | 5099416 LawsofPhysics
LawsofPhysics's picture

Go ahead Janet, raise rates!!

Let the true cost of capital be known to all!!

It's friday, enjoy yourselves all...

Fri, 08/15/2014 - 16:23 | 5099487 Kaiser Sousa
Kaiser Sousa's picture

its all total bullshit and fairy dust...
Silver @ $19 and change - yeah right...
get the fuck outta here banker fucks...
Apmex take me away......

Fri, 08/15/2014 - 16:28 | 5099527 negative rates
negative rates's picture

I told you good luck when I sold you that at $35/oz, you said the chinese were payin $50 and it was going up. You don't have relatives at the fed do ya?

Fri, 08/15/2014 - 16:24 | 5099504 Everybodys All ...
Everybodys All American's picture

The stock market has become a banksters utility. Dead and dormant to any normal corrections.

Fri, 08/15/2014 - 16:27 | 5099519 Keltner Channel Surf
Keltner Channel Surf's picture

Thanks for the volatility.  More, please.

Fri, 08/15/2014 - 16:43 | 5099607 disabledvet
disabledvet's picture

Oil and gold got SLAMMED this week.  I say "look out below.". Negative yields in Germany only shows how low US yields can go here.

Without a doubt commodities are now tied to equities.  Should the latter sell off so will the former as the stock market is the proxy for final demand.

On the other hand "one bull market begets another.". Dollar is still weak to worthless, still have huge carry in the interest rate complex.  "Don't fight the irrationality."

Fri, 08/15/2014 - 16:48 | 5099642 Yen Cross
Yen Cross's picture

   I bought some extra batteries, and mesquite charcoal just in case I have to "bug out" to the guest house if the 'Ghetto Birds'  start tracking my Z/H posts over the weekend. :-),

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