Beta Surge On Hail Mary Hope SNB Will Rescue Euro... For A Few Hours
Presented with little comment as chatter about the EURCHF peg being adjusted spurred some stick-save buying in EUR as it approached the critical 1.3200 level, ES (and most of high beta risk) has spiked up as US equity's day session opened. ES is 18pts off pre-market lows - well ahead of broad risk assets though. Silver and Oil spiked considerably and Gold is shifting higher as the USD leaks off a little. Volume is not that low in ES for now but we would expect it to fade after this opening excitement as Financials are leading the way +1.3% - notably outperforming their credit spreads.
While correlations are still lower than average among the broad basket of risk assets, CONTEXT is pulling higher but with less exuberance than ES for now. 10Y and 2s10s30s are the main drivers of the strength for now followed by AUDJPY's relatively large shift.
In Europe, credit and equity rallied off the lows of early but did not converge considerably. Notably Main and XOver (investment grade and high yield credit) are now rolling back wider - suggesting risk-on is slowing for now - and financials underperformed considerably on the way up.