Bonds Best Day In 7 Weeks Sparks US Equity Chaos

It appears the Bond Bears are in retreat...

 

Asset-gatherers and commission-takers proclaimed China was stable again and in control after it managed a tiny rebound after Monday's carnage...

 

Europe managed a rebound...

 

As Italian yields collapsed after early weakness on hope that a deficit deal could get done...

 

But US equities were chaotic to say the least as the cash open came...most especially Nasdaq...

NOTE - as soon as Europe's bond market closed (which had seen huge buying in Italian bonds), US equities tumbled.

On the day, Trannies were the worst performer (down 4 in a row), Small Caps suffered again and the rest clung to unchanged...

 

Futures show the week's performance best - utter chaos...

 

Small Caps continue to hover at 200DMA...

 

And Nasdaq failed to hold its 100DMA...

 

FANG Stocks were unable to get back to even on the week...

After a well-earned break yesterday to celebrate indigenous peoples day or something, it seems the bond bears took the day off... apart from at the short-end...

 

30Y yields dropped 8bps from the highs of the day...

 

This was the best day for the long bond futures since mid-August...

 

And the yield curve flattens most since May (a nearly 10bps collapse in the curve intraday)

 

The Dollar roundtripped again - dumping overnight gains during the US Session to end lower on the day and unchanged on the week...

 

Emerging Market FX was mixed but the Rand, Real, Ruble, and Argentine Peso all ripped higher as the dollar sank...

 

Despite the Dollar weakness, commodities did little on the day aside from crude and copper...

 

Finally, we wonder if it's time for some 'rebalancing'?