Equity markets were lifted on a sea of USDJPY stops this morning to open higher and press to the week's highs. Once 102.00 was achieved and Europe closed, headlines started to stall stock exuberance. The initial downturn was when BES cancelled its shareholder meeting, the dip was bought, then Europe unveiled its sanctions started to take stocks down and then the US unleashed a further round of sanctions targeted at banks and that dragged stocks to the lows of the day. Trannies were worst down 4 days in a row. This move merely caught stocks down to bond's less-than-exuberant day. Treasuries rallied with yields dropping 2-3bps on the day. The USD surged to 6-month highs, ending up 0.2% from Friday. Credit markets continue to sell off notably. VIX closed back above 13 (highest in 2 weeks). The Russell is -1.65% YTD and 4.5% in July (on course for worse month in over 2 years). It appears sanctions fears trumped turbo Tuesday and the pre-FOMC pump.
NOT OFF THE LOWS
USDJPY lifted to 102 and dragged stocks into the open... then when Europe closed, AUDJPY took over BUT when US sanctions hit, stocks dislocated...
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Bonds were not buying the USDJPY ramp...
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The Nasdaq remains green post MH17 headlines but the rest are fading fast...
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Trannies have been the hardest hit off the highs last week, down over 3.4% since Thursday highs...
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The Russell 2000 is the only red index for July (so far)...
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Credit continues to selloff...
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Notable demand for USDs today... against all majors...
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The USD hit 6-month highs...
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as bonds were bid aross the curve...
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Charts: Bloomberg
