Bond Bulls Battered In Yield Flash-Crash As Tech Stocks Tumble

Only one clip for today really...

Well, instead of starting with stocks, Bonds and FX dominate the headlines today - a flash-crash across the Treasury yield curve and a collapse and failed intervention in the Brazilian Real.

Treasury yields topped around 5amET this morning (with 10Y unable to reach 3.00% despite a good run at it in the last few days). The bid started in bonds, picked up through the US cash open, then accelerated dramatically at around midday ET, flash-crashing 10-12bps across the entire treasury market...

With massive volume flooded through futures - more volume than on the payrolls print...

 

10Y Treasury yields were unable to break 3.00% before tumbling..

 

The yield curve flattened on the day also ...

 

Meanwhile, the most significant of EM FX markets - Brazil - was in utter turmoil as another $3 billion intervention failed miserably and the Real crashed to new cycle lows...

Putting that in context, it's really ugly...

We also note that Brazil halted its bond market trading and there is an unmistakable relationship between the timing of the Real's plunge and the collapse in Treasury yields...

And that's why what happens in Brazil matters! Everything is connected.

Tech stocks extended their underperformance from yesterday afternoon...

Value dominated growth today...

Trannies remain red on the week as Dow outperforms...

VIX briefly popped its head back above 13 today but was quickly slapped lower...

 

After spiking to its highest levels since the peak of the dotcom bubble in March 2000, the S&P tech sector relative to financials has

 

The Dollar Index did it again - basically flatlining for 16 straight days... (1168, 1170, 1169, 1168, 1169, 1168,  1171, 1173, 1177, 1170, 1171, 1172, 1171, 1172, 1170, 1170...)

 

But while the broad dollar index has gone nowhere, EM FX has collapsed relative to it...

 

Cryptos also flatlined today with all holding gains for the week...

 

Oil outperformed but copper faded off early gains as gold and silver trod water...

 

Three days in a row now gold has spiked, finding support on any drop at the $1300 level...

 

Copper/Gold and 10Y Yields have recoupled once again...

 

 

 

 

 

 

Comments

ASimpleTrader Solosides Thu, 06/07/2018 - 16:27 Permalink

Yup. Non warehouse employees get 30% of their salary as stock with 2 year vesting cycle. That's a TON of stock that gets put out into the markets. And then because its 30% of your salary, when it vests, you need to sell some just to make up the 30% 'loss' of actual income. Now think about Amazon's stock volumes and realize how much is from their own employees.

In reply to by Solosides

ECONOMICRESET Thu, 06/07/2018 - 16:05 Permalink

How are bond bulls “battered” as yeilds crash? Fix your headline. If yeilds crash and I’m long bonds I make money! Oh and fix you fucking website it keeps crashing...

Kaiser Sousa Thu, 06/07/2018 - 16:06 Permalink

“Just get it back above 25,000 and hold it there this time will you!”

- Jerome Powell -

We’ve freed up the animal spirits. You can see that by the confidence indexes. We’re rolling - the U.S. economy is rolling…”

 - Larry Kudlow -

"The Dow is being driven primarily by Boeing (BA), Microsoft (MSFT), Caterpillar (CAT) and United Health. On Tuesday, I calculated by hand that the big move higher by AMZN was responsible for 43% of the performance in the S&P 500...Economically in the U.S. the bold propaganda-laced, heavily “adjusted” Government-manufactured economic reports continue to diverge from the economic and financial reality on Main Street.  Housing, auto and retail  sales are deteriorating now as the majority of U.S. households have found themselves stuffed like a French goose readied for foie gras production."

http://investmentresearchdynamics.com/another-blow-off-top-in-stocks/

DEATH TO THE MONEYCHANGERS.

Kaiser Sousa Thu, 06/07/2018 - 16:29 Permalink

"Switzerland’s AHV/AVS fund is shifting to physical gold for the commodity exposure in its CHF35.2bn (€30.5bn) portfolio.

At the end of last week the first pillar buffer fund tendered a custodianship and storage for CHF700m in gold bars via IPE Quest.

The bars are to be stored in Switzerland either collectively or individually, the tender (QN-2447) states.

The tender marks a shift in the investment strategy for AHV/AVS, as it previously only invested in gold and silver via swaps.

 
As per March 2018, the fund held CHF682m in gold and a minor investment in silver, with a target allocation to precious metals of 2%.

This means by year-end the swaps exposure to silver would have to be phased out and the precious metal portfolio would consist of physical gold only."

https://www.ipe.com/news/mandates/swaps-swapped-switzerlands-ahv-moves-…

haters please keep hating...

 

romario Thu, 06/07/2018 - 18:45 Permalink

Tyler and ZH readers, what if the FED surprises and does not raise rates next Wednesday? could this be the white swan global central banks are praying for?

careful short sellers... not much upside and a lot of potential on this one... stay out of shorts at the announcement and redo positions after it... my call