Once Europe closed, US equity markets rolled over on what is a new 'lowest-volume-day-of-the-year' led by recent winner Russell 2000. The Dow is now red on the week and the Nasdaq up 11 days in a row. Today was not about stocks though (aside from the close). While CAD saw its best gain in over 2 years, it was US Treasuries (as EUR weakened and Bund yields plunged) that made the flashing red headlines with 30Y back at 15-month lows (at 3.10%) and 10Y -3.5bps at 2.36% as the yield curve flattened even further. 2s30s dropped below 260bps – its flattest since Dec 2012. Un-de-escalation concerns evident in TSYs and credit finally started to bleed into VIX and stocks. Gold, silver, and oil limped higher as US weakened (and copper fell). A desperate buying panic into the close smashing S&P futures to VWAP magically enabled the S&P to close at the confidence-inspiring centrally-planned 'wealth effect' level of 2000.07!!
Come on…
all thanks to the machines driving S&P 500 e-mini futures back perfectly to VWAP…
Seriously…
Treasuries were once again heavily bid…
And the divergence grows…
leaving the Dow red on the week…
and Utes heavily bid into the close – not exactly risk on!!
The yield curve is utterly collapsing…which bodes very badly for P/E multiple expansion
Credit markets widened once again…
FX markets saw USD weakness as EUR strength (QU unlikely) and CAD strength (technicals and tax inversions) dragged it lower
Commodities trod water (copper dropped) despite the USD weakness
Charts: Bloomberg
via Zero Hedge http://ift.tt/1AVcPNJ Tyler Durden