Market In Shock By Yellen's First FOMC Appearance

Concerns about Fed "over-optimism" admissions and shortening the time from taper to rate-hike sparked a major algo-surging risk-off dump in US equities... but that 1% dip was bought with hands and feet as reassuring figures emerged on screens to pat traders heads gently. Stocks bounced but then faded into the close as Yellen's first press conference saw the worst market performance since Bernanke's May Taper hint. Bonds had a bad day... massive bear-flattening occurred on the release with 5s30s -12bps (5Y +16.5bps, 30Y +4.5bps) to 19-month lows. The USD was smashed 0.75% higher - its biggest gain in 7-months. Gold (and silver) dropped (down 4% on the week) as copper short-squeezed up to key resistance after early significant weakness.

 

The S&P 500 tracked AUDJPY through all the excitement...

 

The reaction in stocks is full of confusion - initial weakness which recovered quickly, then a plunge on over-confidence and rat-hike-period comments... which were then bid...

 

With financials outperforming in the sell-off (but yield curves flattened dramatically!!?)

 

Treasury yields soared (led by the short-end)

 

As the Treasury curve flattened dramatically... the biggest single-day flattening since Sept 2011

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USD Index screamed 0.75% higher...

 

Gold and silver slipped as copper ripped

 

In summary - Bonds Dumped And Dollar Pumped As Stocks Stumble On Yellen Mumble

 

Charts: Bloomberg

Bonus Chart: Copper WTF Chart of the day...