Yesterday's epic short squeeze in bonds (belly-specs were most short in years) and stocks ("most shorted" were heading notably lower into the statement) seems to have flushed out any and all the marginal buyers (for now) on the basis that the Fed will not be Tapering any time soon. Simply put, the best performers from yesterday were the worst performers today with 5Y and 7Y Treasury yields underperforming (+6bps or so) and the long-end retraced more than half its yield move yesterday. In stocks it was the same story, builders and utilities were the biggest losers today after being the best yesterday. The USD retraced higher with JPY weakness (Abe was not happy) as a major driver (testing up to 99.50). WTI Crude unwound all its Fed gains and then some, trading back to around $106 by the close. Gold, silver, and copper were the winners on the day - extending gains modestly. Stocks tracked oil and bonds today (not FX carry), AAPL slid into the close on disappointing UK pre-order rumors, and HY credit underperformed stocks.
Trannies held up but the rest of the major indices slid all day...
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The big winners from yesterday were the big losers today...
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Across the baord risk assets, correlations picked up between bonds, the USD and stocks but gold and oil were the outliers...
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as the big short squeeze from yesterday stabilized today...
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Credit markets underperformed stocks...
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but gold, silver, and copper are holding on to gains for now...
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as bonds sold off from the Asian open last night...
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Charts: Bloomberg