Apart from a 45-minute period from 1030ET to 1115ET (POMO) of totally failed momentum ignition, US equities and USDJPY were once again perfectly coupled leaving the Dow and S&P in the red today and the rest practically unchanged on dismally low volumes. Treasuries continue to slide with yields now 5bps (30Y) to 10bps (5Y) higher in the last 2 days (the worst 2 days for 5Y in almost 2 months). The USD ended practically unchanged on the week (once again) as EUR weakness (Coeure comments on negative rates) offset GBP strength (Carney comments). VIX traded down to 14.02% intraday (and the term structure is very steep and complacent once again). Gold (new 3-month highs) and silver surged intraday but the afternoon saw selling even as bonds, stocks, and the USD weakened. Dow remains below 16k.
The correlation remained strong apart from a total dislocation between 1030 and 1115ET (POMO) that failed to spark any momentum in US equities
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The day started with the ubiquitous pump for retail but then faded
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The Nasdaq remains the only major index in the green for 2014...
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Treasuries continues to push higher (but remain considerably less positive than stocks)...
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FX markets were volatile BUT the USD index remains unchanged on the week (EUR weakness on Coeure's negative rates comments and GBP strength on Carney comments)...
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Gold made new 3-month highs but PMs were sold in the afternoon as stocks went limp and bonds sold off...
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Charts: Bloomberg
Bonus Chart: (h/t @Not_Jim_Cramer) Fed admits its balance sheet has "ballooned" [12] but asset prices not in a bubble...?
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Bonus Bonus Chart: (h/t @BennettWoodman ) - Sustainable? Profits are above trend by a wider margin than all previous profits booms save 1916...
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