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In case you missed it. Markets soared on the back of possibly the darkest day in central-planning banking largesse. Gold and Silver were the biggest winners, though stocks will get all the attention we are sure. Treasuries initially sold off on the news that this was an MBS program (and mortgage spreads collapsed from already record tights) but by the close, Treasury yields had almost round-tripped to pre-FOMC levels. For the first hour or so after the news, all assets moved in sync and correlations soared across risk-assets, but as the afternoon wore on, FX carry consolidated, Treasuries retreated (and 2s10s30s fell), dragging risk lower leaving stocks up near their highs in a world of unicorns and free-money. Notably, it appeared that stocks caught up to high-yield credits' recent exuberance and then found little ability to push ahead. HYG (the high-yield bond ETF) remains notably rich to real bond prices. VIX tumbled under 14% (down almost 2 vols) but notably the term structure of vol collapsed even more - as it seemed the QuEnfinity prompted longer-term hedges to be lifted. A remarkable day in many ways as the S&P crosses over 14x P/E and AAPL over 20% of the Nasdaq-100.

 

Today across asset classes...

 

VIX term structure collapsed (not just the front-end but the longer-term also dropped notably) - see lower 2 panes with year-to-date flats in the curve...

 

What stopped equities' exuberance today? perhaps the catch up to high-yield credit?

 

or - did the drop in risk-asset support start to stagger hope? Certainly this afternoon, Treasuries and 2s10s30s (as well as FX carry) did not follow along with the excitement...

 

Mortgage spreads collapsed...(as low as 38.6bps at iots tights!!)

 

as bond yield retraced all afternoon...

 

but financials roared - as we assume people think they'll be selling their MBS to the Fed? Because at these levels of spread (and given the curve's flattening on the day), NIM ain't gonna be it...

 

Charts: Bloomberg and Capital Context

 

Bonus Chart: Despite all this excitement - Facebook managed (drum roll please) to end down 1.2%