Late in the day as news broke of Iran nuclear talks, Oil lost some of it sheen and Gold overtook it year-to-date. Gold is now up 3.6% YTD against stocks up 1.9% (and the USD up 0.75%) as we saw stocks on their own today compared to credit markets and broad risk assets. Instead of following yesterday's stability post-Europe, FX (from a USD perspective) continued its uptrend as equities (led by financials - led by BofA on refi rumors) surged into the green as high yield credit, investment grade credit, and high-yield bond ETFs all lost ground on the day. Treasuries did sell-off (directionally correct at least) with stocks rallying but did not move as much on a beta-adjusted basis (even though 30Y is now 16bps wider this year).
[6]
US equities (BofA +11.1% YTD against the next best JPM at a mere 3.3% YTD seems - as we said earlier - a little bit of a stretch) disconnected once again from credit markets...
[7]
..and from broad risk markets in general (CONTEXT).
[8]
and Gold inches ever closer to its 200DMA and is now outperforming stocks and Oil on the year...
[9]
though the fact that Treasuries did not sell-off as
much as stocks would have 'expected' and the USD strength diverged
dramatically from recent relationships is notable...
[10]
As EURUSD ends at its worst levels of the day holding under 1.28.
Charts: Bloomberg