Gold and Treasuries tipped their hands a little pre-FOMC and risk assets plunged immediately on the release's lack of an explicit and immediate print-fest gratification. But between short-squeezes (and stating the obvious news) from Europe and a dangling-chad of hope for future QE as the economy was marked down to a 'must-do-better' grade by Bernanke, we ripped higher in most risk-sensitive assets to test the day's highs. We then plunged back down to the lows of the day as the press-conference went on and left most wanting more kool-aid than Ben was willing to deliver. However, with 10 minutes to go in the day, EURUSD staged an impressive squeeze higher of shorts and that dragged stocks up to VWAP and beyong for a green close. What a shit-show - excuse our French. Gold had outperformed for much of the sell-off and recovery and Treasury yields, the USD, and stocks had stayed in sync with one another - until the last few minutes when stocks and the USD went vertical and overshot gold. Commodities were generally decimated on the day (with WTI -2.7% on the week, Silver -2%, Gold -1.2%, and Copper unch) while the USD is modestly lower -0.23% on the week ending the day practically unch having given all its gains back in the last few mins. Stocks trading very technically, stalling the sell-off at Friday's closing level, pivoting on volume around VWAP and Monday's opening highs, and closing at basically yesterday's day-session close. Despite stocks lack of excitement (though intraday bipolarism), VIX managed to drop notably - down 1.2 vols to close at almost 17.00% (its lowest in 7 weeks). Treasuries ended the day mixed with the long-end lower in yield (not participating in the selloff that dragged the rest of the curve higher by 4-5bps). EURUSD squeezed back up over 1.27 by the close and HYG outperformed (ending notably rich to stocks and its own fair-value).
ES traded on some very clear technical levels today with low average trade leading us up into the close and the bigger players capping the run at the close just above Monday's opening highs...
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Financials round-tripped from the pre-FOMC levels and enjoyed their high-beta lift into the close...
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Stocks also benefitted from the seeming exuberance in HYG today which pushed to notably rich levels over its intrinsics (lower pane) and also over stocks...
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Gold was leading up and down for a while there but into the close the squeeze for 1.27 EURUSD dragged ES to outperform post FOMC...
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It would seem that the Feds is apt to squeeze shorts wherever it can find them and that helped bring us to a perfectly UNCH close in ES.
The chaos is commodities was remarkable but more than anything is was clear that Oil was not happy about no new QE...
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and Treasuries split with the long-end outperforming as the short-end sold off back into the close...
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amnd the flucrum security today was...drum roll please... EURUSD where the maginot line of 1.2700 was key to defending US equities - even as correlations across the other asset classes dropped...
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Charts: Bloomberg