Did The Fed Leak The European Bailout Decision On Monday Morning? A Visual Exhibit

We talked about the total disconnect between US equities and the rest of the global financial market on Monday morning. At the time, many market participants commented that they had not seen this kind of disconnect so broadly and how strange it was - and with reasonable volume (unusual for an upswing). Well, now we have some details on what exactly was said and done on Monday with the Fed decision, perhaps it is clear that someone somewhere was tipped off that this was coming as the rest of the world's risk assets leaked inexorably lower and US equities hugely outperformed.

Instead of comparing ES (the e-mini S&P Futures Contract) against each and every risk asset, we use CONTEXT (which attempts to aggregate many of the global risk drivers into one indicator). Its clear at least from the chart that regimes shifted dramatically on Monday and we also noted that European equities were so dramatically disconnected from credit that evidently someone was 'guessing' really well with a large amount of flow.

Chart: Bloomberg