Equity prices tumbled early on - giving up all Friday's gains - before rampaging phoenix-like (thanks to an AUDJPY driven short squeeze) back to 'unch' after rumors of ceasefire discussions in Israel rolled around trading desks. Oil - it appears - was looking at the death-toll (and the fact that Hamas can only accept a deal that denies Israel's existence) and soared back towards $105 (its 2nd biggest day in over a month) notably divergent from stocks. The Russell 2000 was the laggard all day (ramped the most of the lows on the squeeze) and Trannies the leader. Since the MH17 headlines hit, the Nasdaq is the only index green, Treasury yields are -4bps, and oil up almost $4. The USD ended the day unch, 30Y Yield -2.5bps, gold, silver, and copper up modestly, and VIX up 0.5 vols at 12.7. Stocks closed on the weak side.
Friday's gains gone then regained... V-shaped recoveries everywhere... lower highs though...
[8]
Shorts triple squeezed today... but ended weak...
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On the day, the morning dump was met by the AUDJPY pump.... to fill the gap... The Russell 2000 is -1.4% YTD and has crossed its 200DMA every day in the last 3 days...
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Since MH17 Headlines, most indices are still red except Nasdaq of course.. why not buy the most growth-sensitive stocks at a time when geopolitical angst look sset to slow global growth (ask Germany)..
[11]
AUDJPY was in charge all day...
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As an FYI - we note the selling in US equity futures started as Europe opened...
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Bonds sold off (yields rose) as Obama spoke and did not unleash more sanctions hell and rumors of cease-fire discussions helped..
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Credit markets remain less exuberant at what great news world war 3 is...
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It appears Oil prices are continuing to reflect notably concerns about geopolitical tensions... but stocks not (not oil inverted to show 'negative' implications)
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And bonds appear to reflect safe haven concerns (or growth concerns) a little more than stocks...
[17]
Since MH17 headlines hit, gold and silver are up...
[18]
Charts: Bloomberg
